FTE or Pro Rata? Understanding Salaries

If you’re job hunting, you might’ve come across a few terms or figures you’re not familiar with around how salaries are calculated and advertised, especially if you’re looking for part-time positions. We’re here to help break down how a salary is calculated, so that you know what a role is worth, and more importantly, if it’s going to be the right one for you:

FTE – Full Time Equivalent:

Have you seen FTE written in relation to a salary i.e. $80,000 FTE? This means “full time equivalent” and is essentially telling you that if you work full-time hours, the salary will be $80,000 per annum.

When looking at an FTE salary, it’s good to know how many hours they’re basing the calculation off. Most full-time roles in NZ are either 40 or 37.5 hour working weeks, but this is at the employer’s discretion and in some cases can be less than that. Technically speaking, a full-time role is considered to be anything that’s above 30 hours per week, so if it’s not made clear in the ad listing or position description, don’t be afraid to ask what the FTE hours are.

Pro Rata:

This one can trip people up sometimes so it’s a good one to get your head around. If you’re looking for part time roles, you’ll very likely see this term a lot. When “pro rata” gets mentioned, it means that what you’ll be paid is adjusted to suit the hours.

For example, if the FTE salary for a role is $100,000 and based on 40 hours per week, but you’re only going to be working 20 hours each week in the role, you’ll be earning $50,000 for those part time hours. A role like this would be considered a 0.5 FTE – half of a full-time role.

Hiring managers and job ads will often default to talking about the FTE salary, so if you see something listed that mentions pro rata or shows a percentage point before the FTE – chances are the salary range you’re seeing is for full time hours and you’ll need to do some quick calculations to work out what the part time salary will be for the role.

If you’re ever in doubt, don’t be afraid to clarify if the advertised salary is the FTE or pro rata amount.

KiwiSaver Contributions – Inclusive or Exclusive?

Salaries can be either inclusive or exclusive of the employer KiwiSaver contribution and it’s important to know which is which when considering a new role. If you see a salary that talks about KiwiSaver as ‘inclusive’ – this means the employer KiwiSaver contribution is part of the FTE salary range you’re looking at, so when considering roles remember to deduct that when you’re trying to figure out what your take home pay will be. Salary ranges that talk about KiwiSaver as being exclusive means the employer contribution will be on top of the agreed salary.

Total Package:

Sometimes you may see a vacancy referring to a ‘total package of $X’ – when you see that phrasing it typically means the figure you’re looking at is made up of other benefits on top of the salary i.e. a base salary + other benefits such as a car, car park or other things that don’t translate to take-home pay.

If you see something saying “total salary package of $250K” for example – chances are you’re not actually getting $250K less tax into your bank account. However the other benefits you’re being provided by the employer on top of your salary add up to a total value of $250K. So, if you see a job listing that talks “total package” make sure you find out exactly what that entails.

Now you’ve got your head around the different salary terms, get a good understanding of the different types of employment contracts that you might come across. Check out our breakdown of the different types of contracts here.

Ready to negotiate? We have some handy tips on how to have those initial salary conversations as you move through a recruitment process and how to negotiate a job offer once you get to the end.

Good luck,

Nikki and the McLaren Recruitment team