ACA employer mandate (ALE) calculator

The tool does two things. It works out from last year's monthly headcounts whether you are an applicable large employer (ALE) under the ACA, and if you are, it estimates the employer shared responsibility payments under Internal Revenue Code section 4980H. The example numbers are placeholders. Use your payroll records.

How to use it

1. Last year, month by month. ALE status for a year is decided from the prior calendar year. For each of the 12 months enter the number of full-time employees (130 or more hours of service in the month) and the total hours of service of everyone else. Both come from payroll and timekeeping records. Count no more than 120 hours for any one part-timer. The tool adds what you type, so cap each person's hours before you total them.
2. Seasonal workers. Check the box only if the people who pushed you above 50 in those months were seasonal workers.
3. Payment estimate. Pick 2026 or 2027, enter your average number of full-time employees this year, and say whether coverage is not offered to at least 95% of them or is offered but some may get a premium tax credit. In the second case enter how many get one. You will not know the real count until the IRS or a Marketplace tells you, so treat it as a what-if.

The math

A month's full-time equivalents (FTEs) are the part-time hours divided by 120, to the hundredth. The month's total is full-time employees plus FTEs. Average the 12 totals and round down. At 50 or more you are an ALE.

A hypothetical example using the opening numbers: 40 full-time employees (46 in June through August) and 1,500 part-time hours a month. The 1,500 hours are 12.5 FTEs, so most months total 52.5 and the summer months 58.5. The average is (9 × 52.5 + 3 × 58.5) ÷ 12 = 54, so this business is an ALE. All 12 months are over 50, so the seasonal exception, which needs four months or fewer, would not apply even if you checked the box.

For the payment estimate, with 46 full-time employees this year:

• 4980H(a), when coverage is not offered to at least 95% of full-time employees and at least one gets a premium tax credit: (full-time employees − 30) × the yearly amount. For 2026 that is (46 − 30) × $3,340 = $53,440.
• 4980H(b), when coverage is offered but is unaffordable or lacks minimum value: the number of employees who get a credit × the (b) amount, never more than the (a) amount. For 2026, 3 × $5,010 = $15,030.

The 2027 amounts the tool uses are $3,780 and $5,670.

Assumptions and limits

• Companies under common ownership are counted together to decide ALE status, and the 30-employee reduction is shared among them. The tool sees one entity.
• The estimate assumes the same figures every month. Real payments are assessed month by month.
• It does not decide who is full-time under a look-back measurement method, and it does not test whether your coverage is affordable. Use the group health insurance cost and affordability calculator for that.
• Not being an ALE this year says nothing about next year. Recheck annually.
• An ALE also owes information returns to the IRS and employees. See ACA reporting: Forms 1094-C and 1095-C for large employers.
• The IRS indexes the payment amounts every year. Confirm the current figures with a benefits attorney or CPA before relying on an estimate.

For the rules behind the numbers, read The ACA employer mandate: who must offer coverage and the 2026 penalties and Benefits for part-time and seasonal workers: ACA and eligibility rules. The glossary explains an applicable large employer and a full-time equivalent.

Where the figures come from

• ALE status, FTEs and the seasonal worker exception: 26 CFR 54.4980H-2.
• The payment formulas: 26 U.S.C. 4980H.
• 2026 amounts ($3,340 and $5,010): IRS Rev. Proc. 2025-26. 2027 amounts ($3,780 and $5,670): IRS Rev. Proc. 2026-22.