The fully loaded cost of an FTE = Direct Cost + Indirect Cost

It is important to understand the effect of cost choices because if you choose to rent premises in the heart of the city, then you will have a higher “fully loaded” FTE cost than someone who rents premises in the suburbs. When you compare your cost performance against others you need to understand this. You could process the same volume per FTE as someone else but at a higher cost because of your organisations cost choices.

An easy way to estimate an FTE’s “fully loaded” cost
The “fully loaded” cost is most likely in the range of 2 to 3 times the salary / wage cost of the FTE

• eg: if the FTE is paid $50,000 pa the fully loaded cost of that person will probably be in the range of $100,000 to $150,000 pa. 

You can test this by taking your:

• Total organisation annual budget
  
• Total organisation annual salary / wage budget
  
•  Divide both by the number of FTEs in the organisation
  

Compare the two results and you will get an idea as to what your organisations “fully loaded” cost multiple is.