# 13 CFR § 121.106: How does SBA calculate number of employees? > Federal · Regulations · In force URL: https://www.frixlaw.com/law-library/statutes/ecfr-13-121.106 ## Section - **Citation:** 13 CFR § 121.106 - **Heading:** How does SBA calculate number of employees? - **Jurisdiction:** Federal - **Kind:** Regulations - **Status:** In force - **Text as of:** September 22, 2026 - **Source:** Publisher's official text - **Location:** Title 13—Business Credit and Assistance > CHAPTER I—SMALL BUSINESS ADMINISTRATION > PART 121—SMALL BUSINESS SIZE REGULATIONS > Subpart A—Size Eligibility Provisions and Standards > Provisions of General Applicability ## Text (a) In determining a concern's number of employees, SBA counts all individuals employed on a full-time, part-time, or other basis. This includes employees obtained from a temporary employee agency, professional employee organization or leasing concern. SBA will consider the totality of the circumstances, including criteria used by the IRS for Federal income tax purposes, in determining whether individuals are employees of a concern. Volunteers (i.e., individuals who receive no compensation, including no in-kind compensation, for work performed) are not considered employees. (b) Where the size standard is number of employees, the method for determining a concern's size includes the following principles: (1) The average number of employees of the concern is used (including the employees of its domestic and foreign affiliates) based upon numbers of employees for each of the pay periods for the preceding completed 24 calendar months. (2) Part-time and temporary employees are counted the same as full-time employees. (3) If a concern has not been in business for 24 months, the average number of employees is used for each of the pay periods during which it has been in business. (4)(i) The average number of employees of a business concern with affiliates is calculated by adding the average number of employees of the business concern with the average number of employees of each affiliate. If a concern has acquired an affiliate or been acquired as an affiliate during the applicable period of measurement or before the date on which it self-certified as small, the employees counted in determining size status include the employees of the acquired or acquiring concern. Furthermore, this aggregation applies for the entire period of measurement, not just the period after the affiliation arose. (ii) The employees of a former affiliate are not counted if affiliation ceased before the date used for determining size. This exclusion of employees of a former affiliate applies during the entire period of measurement, rather than only for the period after which affiliation ceased. However, if a concern has sold a segregable division to another business concern during the applicable period of measurement or before the date on which it self-certified as small, the employees used in determining size status will continue to include the employees of the division that was sold. [61 FR 3286, Jan. 31, 1996, as amended at 69 FR 29203, May 21, 2004; 84 FR 66579, Dec. 5, 2019; 87 FR 34120, June 6, 2022] ## Nearby sections - [13 CFR § 121.101 § 121.101 What are SBA size standards?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.101.md) - [13 CFR § 121.102 § 121.102 How does SBA establish size standards?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.102.md) - [13 CFR § 121.103 § 121.103 How does SBA determine affiliation?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.103.md) - [13 CFR § 121.104 § 121.104 How does SBA calculate annual receipts?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.104.md) - [13 CFR § 121.105 § 121.105 How does SBA define “business concern or concern”?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.105.md) - [13 CFR § 121.106 § 121.106 How does SBA calculate number of employees?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.106.md) - [13 CFR § 121.107 § 121.107 How does SBA determine a concern's “primary industry”?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.107.md) - [13 CFR § 121.108 § 121.108 What are the penalties for misrepresentation of size status?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.108.md) - [13 CFR § 121.109 § 121.109 What is a small business status advisory opinion?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.109.md) - [13 CFR § 121.110 § 121.110 What must a concern do in order to be identified as a small business concern in any Federal procurement databases?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.110.md) - [13 CFR § 121.201 § 121.201 What size standards has SBA identified by North American Industry Classification System codes?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.201.md) - [13 CFR § 121.301 § 121.301 What size standards and affiliation principles are applicable to financial assistance programs?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.301.md) - [13 CFR § 121.302 § 121.302 When does SBA determine the size status of an applicant?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.302.md) - [13 CFR § 121.303 § 121.303 What size procedures are used by SBA before it makes a formal size determination?](https://www.frixlaw.com/law-library/statutes/ecfr-13-121.303.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/ecfr-13-121.106. Check the current official text before relying on it. Not legal advice.