Small business health insurance calculator: employee count and tax credit

Enter how many full-time and part-time employees you have, not counting owners. The calculator shows your full-time equivalent count the way the Affordable Care Act counts it, whether you are under or over the 50 employee line, and an estimate of the small business health care tax credit.

Rules checked October 26, 2026

Full-time employees (30 or more hours a week)

Part-time employees

Average hours a week for each part-timer (under 30)

Average yearly pay per employee ($, optional)

What you pay toward employee premiums in a year ($, optional)

Do you pay at least half of the employee-only premium?

Leave yourself and other owners out of the counts.

Your full-time equivalent employees

10employees

Counted the way the Affordable Care Act counts, your 8 full-time employees and 4 part-time employees add up to about 10.9. Fractions are rounded down, so the number that counts is 10.

Under 50, the employer mandate does not apply to you, so you are not required to offer health insurance. If you want to, you can buy a small group plan (generally open to employers with 1 to 50 employees), reimburse your team through a CHOICE arrangement (formerly ICHRA), or, with fewer than 50 full-time employees and no group plan, set up a QSEHRA.

For the small business health care tax credit, the IRS counts 2,080 hours a year as one employee, which gives you about 10, under the limit of 25. Enter your average yearly pay and what you pay toward premiums to estimate the credit.

A rough estimate, not tax or legal advice. Leave yourself and other owners out of the counts (the tax credit also leaves out partners, S corporation shareholders with more than 2%, other owners with more than 5%, and their family members). Real counts use each month's actual hours, and the employer mandate uses your average over the prior year. The credit estimate follows the final 2025 IRS rules (the 2026 and 2027 limits are not final yet) and leaves out the state average premium limit, tax-exempt employers, seasonal workers and state subsidies. A tax professional or licensed agent can check your real numbers.

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This is an estimate for general information, not an insurance quote or advice. Confirm dates and costs with your plan, your marketplace or Medicare.

How are my employees counted?

For health plans and the employer mandate, a full-time employee works an average of at least 30 hours a week, or 130 hours in a month. Each part-time employee adds their monthly hours, up to 120 hours each, and the total is divided by 120 to give full-time equivalents. The result is added to your full-time employees and rounded down. This calculator multiplies the weekly hours you enter by 52 and divides by 12 to get monthly hours. Leave owners and their family members out of the numbers you enter.

How is the tax credit estimated?

The small business health care tax credit uses a different count, in which 2,080 hours a year equal one employee. To qualify you need fewer than 25 of those, average yearly pay under $67,000 per employee and a plan where you pay at least half of the employee-only premium. The credit is up to 50% of the premiums you pay. It is reduced as you pass 10 employees and as average pay passes $33,000. These are the final IRS limits for 2025, the latest the IRS has published, and the 2026 and 2027 limits may differ. You can claim the credit for 2 years in a row, and it generally requires a qualifying small group plan bought through SHOP.

What does it leave out?

It uses one number for the whole year, so seasonal workers and people who join or leave mid-year are not handled. The employer mandate uses your average over the previous calendar year. The credit estimate also leaves out the limit that compares your premiums with the average in your area, tax-exempt employers and state subsidies. Ask a tax professional about your own return, and a licensed agent about the plans you can buy.

Want group plan prices for your team?

A licensed agent compares small group plans and CHOICE arrangements and shows you what each would cost. It costs you nothing.

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About Small-Group Health

Common questions

Do part-time employees count toward the 50 employee line?

Yes, as full-time equivalents. Their monthly hours, up to 120 per person, are added together and divided by 120. A business with 40 full-time employees and 30 part-time employees working 20 hours a week has about 61 full-time equivalents, because the part-timers add about 21.7.

Do I count myself as an employee?

Not for the tax credit, which leaves out sole proprietors, partners, S corporation shareholders with more than 2%, other owners with more than 5% and their family members. For a group health plan, you also need at least one employee who is not an owner or the owner's spouse.

How much is the small business health care tax credit worth?

Up to 50% of the premiums an eligible employer pays, or up to 35% for a tax-exempt employer. It is smaller for employers with more than 10 employees or higher average pay, and it can be claimed for 2 consecutive years.