How to Calculate Hours Worked

A common question that often comes up is "how do I manually calculate hours worked from my time clock?".   Calculating work hours can be tricky.  Today we would like to explain how to calculate your work quickly using basic math. 

For those who do not enjoy math, we provided a free time card calculator and decimal hours to hours and minutes converter, these free tools will make calculating hours a breeze.

If you are looking to completely automate employee time tracking, check out OnTheClock, its free for 2 employees or less

Picture of an old school time clock.

Calculating Hours Worked 

There are two methods for calculating hours worked.  The first is manually calculating hours, and the second preferred method is using a "time clock software."  Performing manual math calculations can be timely and error-prone; while OnTheClock's business time clock handles all the calculations for you.

 

How to manually calculate employee hours

There are various methods for calculating employee hours worked.  The most common involve recording start time and end times for hours worked.  Some employers, require their employees record their hours on paper, while others use a punch clock system to log hours.  Once work hours are recorded, the employer will need to tally up the totals for payroll.

Example of how to calculate total hours worked

Here we are going to explain how to manually calculate hours worked.  To do this, you will need a start and end time. The goal is to determine an entire duration worked using the recorded hours and minutes.  For example, starting @8:30 am and ending @3:45 pm would result in 7 hours and 15 minutes worked. 

Here's how to determine hours worked:

  1. Convert all times to 24 hour clock (military time):
    1. Convert 8:45 am to 08:45 hours.
    2. Convert 3:45 pm to 15:35 hours.
  2. Next, Subtract the start time from the end time.
  3. Now you have the actual hours and minutes worked for the day.
  4. Finally to determined total wage, you will need to convert this to a decimal format.

math example for time card calculations.

How to convert hours to decimal value and calculate gross wage

In the previous example, we explained how to figure total hours worked for the day. To determine your total employee wage, you will need to convert the total hours and minutes into a decimal format.  Once converted, you can simply multiply employee (time worked * wage) to determine gross pay.  

For example, if an employee works 8:30 minutes, this is 8.5 hours when converted to decimal, multiply it by their hourly wage; this results in a gross wage amount.  Below is a chart that will help you to determine minutes to decimal conversions quickly. 

Minute to Decimal Value Conversion Chart

 minutes to decimal conversion chart.

Tools for tracking employee hours

The Wages and Hour Division does not have an official recommendation for how to track employee hours.  What they do request is that employee hours be recorded as accurately as possible.  Here are some acceptable ways to track time:

  • Pen and Paper time cards.
  • Mechanical time clocks.
  • Free time clock calculators.
  • Timeclock software.

Pen and Paper time cards

Writing down work hours is not a new concept.  In fact, archeologist found evidence of ancient civilizations recording time back to 6000BC. Manually recording hours on a substrate has worked for a very long time.  However, in today's world, there are strict rules, regulations, and legalities.  The Department of Labor has suggestions on how employers should track employee hours, writing hours down is an entirely acceptable solution. 
 
Important note on handwritten time cards.
Should the employee report wage shortages to the Department of Labor, the DOL may rule in favor of the employee if they have a perfect 40 hour week, every week. The DOL would consider a perfect 40 hour work week "unrealistic hours" because they're too perfect.
 

Mechanical time clocks

A conventional time clock is a mechanical device that stamps the time and date onto a paper timecard.  The employer will give each employee a time card for the pay period; it is the employee's responsibility to place the time card in the machine and punch the time card whenever they arrive or leave work.  The employer will tally up the hours worked, the employee is turn paid based on the hours worked.

Free time clock calculators

There is an assortment of free online time card calculators on the internet.  These time clock calculators handle the necessary calculations required to determined hours worked.  Often, they function a lot like a spreadsheet, allowing you to fill in the information and it calculates total hours for you.

 OnTheClock offers a few different time clock calculators that may find helpful.

Time Clock software for tracking employee hours

A more popular option for tracking employee hours is time clock software.  In the past, most of this software required computer installation.  However, in the past ten years things have changed; now most time clock software requires no installation and can be accessed from anywhere.  Time clock software provides many features the traditional time clock cannot.  Here is a short list:

  • Quick and easy setup.
  • Automatic time clock calculations.
  • Employee attendance and time off tracking.
  • Advanced GeoLocation and Job Costing features.
  • Send employee hours directly to payroll software.
  • Mobile and browsers apps for simplicity.
  • View more features here.

Conclusion

This article reviewed a lot of options for tracking employee time.  While the  U.S. Department of Labor does not enforce how employers track employee hours, it does provide guidelines to track employee hours accurately.  Regulations that state how long an employer must retrain payroll related data.  Currently, employers are required to retain timecards and payroll related calculations for at least two years during and after employment. A complete list of wage-related information is located on the Department of Labor website dol.gov.

https://www.dol.gov/whd/flsa/

https://en.wikipedia.org/wiki/24-hour_clock#Military_time

a thought From Tracy on 10/1/2018 ...
I'm am finding my employer shorting me hrs.
a thought From Tim. on 7/20/2018 ...
Is it legal for a company to pay you for 37 hours and they make you work 40 hours.
reply from OTC - Hi Tim, this is definitely illegal. I would suggest starting with you start with a conversation with your employer. If you do not make any progress there, check out the DOL employee complaint site - DOL
a thought From Lesley on 1/7/2018 ...
How does the clock software calculate overtime for employees? How about the week which has a statutory holiday?
reply from OTC -

Hi Lesley, The OnTheClock software provides a list of predefined overtime rules. The employer will select the overtime rule that best fits their overtime requirements. Employee hours and overtime are automatically by the software. I can reach out to you directly to see what your requirements are and how we can help.

In regards to statutory holidays, our software provides the ability to track PTO (paid time off). Using the PTO features, recording holiday, personal and sick days is very easy. Employee hours can be marked as paid or unpaid as well. ~Mark
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