How to Calculate Hours Worked Like a Pro

How to Calculate Hours Worked Like a Pro

Write it down. Add it up. Work it out. Boom — you’ve mastered timekeeping.

How to Calculate Hours Worked Like a Pro

Time is money. And if you aren’t properly tracking the hours employees work, time wreaks havoc on your bottom line. How do you make sure you’re doing it the right way, paying your employees the right wage, and protecting your net income from errors? Consider this your bite-sized guide to calculating hours worked.

The Big Picture

  • Calculating gross wage based on hours worked is simple arithmetic.
  • Calculating net pay is more complicated, as you’ll need to calculate deductions specific to your company.
  • You can save time, reduce human error, and stay compliant by using time clock software to automatically calculate hours worked.

Using Hours Worked to Calculate Gross Wage

To determine the employee wage, you’ll need to convert hours and minutes into decimal format. After that, multiply the hours worked by the hourly wage to find the gross pay.

For example, if an employee works 8 hours and 30 minutes, that’s 8.5 hours after decimal conversion. When you multiply that number by an employee's hourly wage, the result is the amount you’ll pay.

Here, you’ll find a chart to help you make minutes to decimal conversions.

Note that, in order to calculate net pay, you’ll need more information than what this article is able to provide. Specifically, you’ll need to know how to calculate deductions for taxes and withholdings. You’ll also need to know how to calculate overtime and holiday pay to meet both state regulations and your organization’s policies.

decimal conversions chart

Tools for Tracking Employee Hours

The U.S. Department of Labor provides guidelines to help you track employee hours accurately. These are some acceptable ways to track time:

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

Let’s explore each one of these options in more detail.

Pen and Paper Time Cards

Pencil and paper might seem like an easy place to start, but it isn’t right for all businesses or workers. Time theft can be a major problem with the pencil and paper method since it’s difficult to ensure all the hours employees report are accurate.

This also can be a drain on productivity, since you or someone on your team will always need to review these time cards and add up the hours worked for every employee.

Mechanical Time Clocks

This device stamps the time and date onto a paper timecard. For this to work, the employer gives each employee a time card for the pay period. On-site employees then use the time clock to track their hours

It’s the employee's responsibility to clock in and out at the right time. They punch the time card whenever they arrive or leave work. Then, the employee tallies up hours worked, and the employee receives pay.

Free Time Clock Calculators

You can find many free online time card calculators on the internet that will calculate hours worked for you. OnTheClock offers several free time clock calculators:

Time Clock Software for Tracking Employee Hours

A more convenient option for tracking hours worked is time clock software. With OnTheClock, you get several features your business can benefit from.

  • Quick and easy setup
  • Automatic time clock calculations
  • Advanced geolocation features
  • Easy project tracking and job costing
  • Send employee hours directly to payroll software
  • Mobile and browser apps for simplicity

That said? We know OnTheClock may not be the right choice for all business owners. We’ll explain more in-depth about time clock software options later on in this article. But first, let’s discuss how to manually calculate hours worked.

How to Calculate Hours Worked Manually

How to Calculate Hours Worked Manually

If you’re processing payroll for the first time ever, you may be wondering how to add up hours worked by hand. Here’s the step-by-step method for how to calculate hours worked manually.

Step 1: Determine the start and end time of work each day

The first step for calculating hours worked is to note the exact time work was started and finished. If you’re processing payroll for employees, this information should be provided to you on a time card. If you’re processing this information for yourself as an independent contractor, make a note of your own start and end times each day that you work.

Step 2: Convert the time to military time

If you are using a 12-hour clock format, convert the start and end time to the 24-hour format (or military time). For example, if you started work at 9:30 AM, it would be 09:30 in military time. If you finished work at 5:45 PM, it would be 17:45 in military time. Our military time calculator can do this for you instantly.

Step 3: Calculate the time difference

To determine the length of each day worked, subtract the start time from the end time. For example, if you started work at 09:30 and finished at 17:45, the time difference would be 8 hours and 15 minutes.

Step 4: Subtract unpaid breaks.

If you had any unpaid breaks during your work period, subtract the duration of those breaks from the total time calculated in the previous step. For example, if you took a 30-minute unpaid break, subtract 30 minutes from the 8 hours and 15 minutes calculated earlier.

Step 5: Convert the remaining time to decimal format.

Convert the remaining time into decimal format for easier calculations. Our decimal hour calculator can do this for you, or you can refer to our conversion chart above. If you’re a math wiz, you can convert it yourself by simply dividing the number of minutes by 60.

Step 6: Add up the total hours worked for the pay period.

If you need to calculate the total hours worked for a specific pay period, you’ll repeat these steps for each day worked. Then, you can simply add up all the hours you calculated for the entire pay period.

Calculating hours worked is simple arithmetic. That said, if you need to calculate work hours on a regular basis, the process can become quite tedious. If you’re processing payroll for a staff of any size, manually adding hours worked quickly becomes time consuming.

If you’d like to streamline this process, modern technology can help.

How to Calculate Employee Hours Using Software

Whether you’re an independent contractor creating an invoice or responsible for the payroll of an entire company, using software to keep track of hours worked is a great convenience. There are 2 main ways to do this: you can use spreadsheet software (like Google Sheets or Microsoft Excel), or you can use an online time clock.

Tracking Hours with Spreadsheets

One of the most common ways to track hours worked is with a spreadsheet. Keep in mind that you’ll need to create multiple spreadsheets to reflect each worker, as well as each pay period. If you’re an independent contractor, you’ll create a spreadsheet for each client each pay period.

Step 1: Set up your spreadsheet.

First, you’ll need to create a new workbook — we like Microsoft Excel, but these instructions should also work for Google Sheets. To set up your workbook:

  • Name the first column "Date" to track the dates worked.
  • Name the second column "Start Time" to record the start time of each work period.
  • Name the third column "End Time" to record the end time of each work period.
  • Name the fourth column "Total Hours" to calculate the hours worked for each day.

Step 2: Enter the data.

If you’re a freelancer, we recommend that you record your working times throughout the pay period. If you’re processing payroll for employees, you’ll need to obtain this data from your workers. Either way, here’s how to fill out the spreadsheet:

  • In the "Date" column, enter the dates for each workday.
  • In the "Start Time" column, enter the start time for each workday.
  • In the "End Time" column, enter the corresponding end time for each workday.

Step 3: Calculate the hours worked.

In the "Total Hours" column, use a formula to calculate the hours worked for each day. Subtract the start time from the end time to get the duration of work. If you’ve formatted your spreadsheet per our instructions, you can simply enter the formula =C2-B2 into cell D2. That’s because cell B2 is your start time, cell C2 is your end time, and cell D2 is the total hours worked.

Step 4: Format the total hours column

Now, we need to change how the hours worked are formatted.

  • Select the "Total Hours" column (column D) and format it as a time format.
  • Right-click on the column and choose "Format Cells."
  • Select the desired time format (in this case, "hh:mm").

Step 5: Calculate the total hours for the pay period.

Next, we’ll use another formula to tally the total work hours for the pay period. Below the last row of the "Total Hours" column, use the SUM function to calculate the total hours worked for the pay period.

For example, if the "Total Hours" column ends at row 20, the formula for the total hours worked would be: =SUM(D2:D20).

Step 6: Save your spreadsheet.

Remember to save your file periodically to ensure your data is safely stored. It’s best to name your files in a way that helps you keep them easily organized (such as by date). Additionally, you can create different sheets or tabs within the workbook to track hours for different periods, projects, or workers.

That’s it! If desired, you can customize your Excel sheet by adding additional columns for notes, overtime hours, or any other relevant information. You can also use Excel's built-in functions and features to analyze your data further, such as calculating average hours, identifying days with the most hours worked, or creating charts to visualize your work hours.

What about tracking overtime?

One thing to keep in mind is that, if you have non-exempt workers, you’ll need to keep track of their overtime hours. The Fair Labor Standards Act mandates that overtime at a rate of time-and-a-half is paid for any hours worked in excess of 40 in a single workweek.

However, your state regulations may be different; for example, some states mandate that time-and-a-half is paid after 8 hours are worked in a single day. Other states mandate double pay as the rate of pay for overtime.

Additionally, your organization may have stricter overtime policies than what’s mandated at the federal level. Likewise, if your employees work an alternative work schedule, then overtime may need to be calculated totally differently. That’s because alternative work schedules are often compressed, allowing for shifts that exceed more than 8 hours with fewer workdays.

That said, we can provide some general insight into how to track overtime hours — just be sure to stay compliant with federal and state labor laws, as well as your employer’s policies.

Calculating Overtime Hours Manually

Calculating Overtime Hours Manually

Here is a step-by-step guide on how to manually calculate overtime.

Step 1: Determine the overtime threshold.

First thing’s first: like we said above, it’s important to understand the overtime rules and regulations specific to your jurisdiction or company policy. You’ll need this info to determine the number of hours worked beyond which overtime is applicable. For example, it could be any hours worked beyond 40 hours in a workweek.

Step 2: Calculate the regular hours worked.

Next, you’ll want to add up the total hours worked during the designated period (e.g., a workweek). To do so, you can follow the steps we laid out earlier in this article. Exclude any break or meal periods that are not counted as working hours.

Step 3: Determine if overtime is applicable.

Now that you’ve tallied up hours worked, you’ll need to compare the total hours worked with the overtime threshold. If the total hours worked exceed the overtime threshold, overtime is applicable.

Step 4: Calculate overtime hours.

To figure out the number of overtime hours, simply subtract the overtime threshold (e.g., 40 hours) from the total hours worked.

Step 5: Determine the overtime rate.

Double-check your employer’s overtime policy and/or your local labor laws to determine the overtime rate. Typically, overtime is paid at a rate of time-and-a-half. However, other pay rates, such as double pay, are also common.

Step 6: Calculate overtime pay.

Now that you have all the information, you can calculate overtime pay by multiplying the number of overtime hours by the rate of overtime pay. For example, say you’re calculating overtime at a rate of time-and-a-half for someone who worked 44 hours in a workweek. You’d multiply 4 hours by their rate-of-pay, then multiply it by 1.5.

Step 7: Calculate total earnings.

Now that we’ve calculated overtime pay, we can add the regular pay for the regular hours worked to the overtime pay for the overtime hours worked. This total represents the employee's total earnings for the designated period.

Remember, overtime calculation methods may vary based on specific labor laws and company policies. Always ensure you are familiar with the regulations applicable to your jurisdiction and consult any relevant policies or agreements.

How to Calculate Employee Hours Using OnTheClock

Calculating employee hours with OnTheClock is very simple. That’s because we automatically calculate hours worked for you. All you have to do is view them. Here’s how:

Step 1:
        Log in as an admin.
Step 2:
        Navigate to “Time Cards.”
Step 3:
        Click on the name of the employee you’d like to check.
Step 4:
      View their time card and check their total hours worked.

That’s it!

Benefits of Using Time Clock Software

If manually calculating hours worked is slowing you down, a time clock is a solid solution. Time clock software can make your life even easier by streamlining your entire payroll process. Here are some of the benefits of taking your time tracking system online.

  • Accuracy and Efficiency. Time clock software ensures accurate tracking of employee hours, eliminating manual errors that can occur with paper-based or manual methods. It also streamlines the tracking process by automating time calculations, as well as reducing the time and effort required to track and manage employee hours.
  • Time Savings. Time clock software saves valuable time for both employees and employers. Employees can quickly clock in and out using digital devices or even mobile apps. Employers can easily access and review employee timesheets, reducing administrative overhead and allowing them to focus on more critical tasks.
  • Improved Compliance. Time clock software can help businesses stay compliant with labor regulations and ensure accurate record-keeping. It can enforce breaks, meal periods, and overtime rules based on predetermined settings, reducing the risk of non-compliance and potential legal issues.
  • Enhanced Transparency. Time clock software provides transparency to both employees and employers. Employees can view their own time records, ensuring they are accurately compensated. Employers can have a clear overview of employee hours, facilitating fair scheduling, and preventing any disputes or misunderstandings regarding worked hours.
  • Data Analysis and Reporting. Time clock software often comes with reporting and analytics features, allowing employers to generate comprehensive reports on employee attendance, work hours, and other relevant data. This data can be utilized for performance evaluations, payroll processing, project costing, and identifying areas for productivity improvement or cost optimization.

To sum up, time clock software offers numerous advantages, making it a valuable tool for businesses of all sizes to effectively manage and track employee hours.

Popular Time-Tracking Software Options

We might be biased, but we think OnTheClock is the best option when it comes to time tracking, especially if you’re a freelancer or small business. That’s because we’re designed to be an affordable solution with everything you need to track hours worked, stay compliant, and manage employee schedules.

That said? Our software may not be for everyone, so here are a few other options to consider:

  • OnTheClock. OnTheClock is a comprehensive and intuitive time tracking solution that allows employees to clock in from any device, making it suitable for both office and remote workers.
  • Toggl. Toggl is a user-friendly time tracker that offers real-time tracking, reporting, and integrations with various project management tools.
  • Harvest. Harvest is robust time-tracking software that provides time and expense tracking, project budgeting, invoicing, and team collaboration features.
  • TimeCamp. TimeCamp offers automated time tracking, timesheet management, productivity analysis, and invoicing capabilities.
  • Clockify. Clockify is a free time-tracking tool that allows users to track time, generate reports, and manage projects and teams.
  • RescueTime. RescueTime is a time-tracking app that monitors and categorizes how users spend their time to help improve productivity and time management.
  • Hubstaff. Hubstaff is a comprehensive time-tracking and employee monitoring software that includes features such as GPS tracking, activity monitoring, and project management.
  • ClickTime. ClickTime is a web-based time-tracking solution that offers resource planning, expense tracking, and robust reporting features for businesses of all sizes.
  • TSheets. TSheets was recently acquired by QuickBooks, and it provides mobile time tracking, employee scheduling, and real-time reporting.
  • Everhour. Everhour is a time-tracking and resource management tool that integrates with popular project management platforms like Asana, Trello, and Basecamp.

These are just a few of the online time clocks available. Take your time choosing the one that makes the most sense for your business needs (and your budget), and you’ll need it to maintain your records over time, in addition to streamlining your operations.

Factors to Consider When Choosing a Tracking Method

Like we said earlier, it’s important to choose a time tracking method that makes the most sense for your business needs. The following should be top-of-mind when deciding which tracking method works best for you.

Accuracy and Reliability

Look for a time tracking method that offers accurate and reliable tracking capabilities. Consider the precision of the system, its ability to capture different types of work hours (regular hours, overtime, breaks), and its reliability in accurately recording and storing data.

Ease of Use

Consider the usability and user-friendliness of the time tracking method. It should be intuitive and easy for both you as the business owner and your employees to use. Look for features such as simple clock-in and clock-out functions, clear interfaces, and ease of generating reports.


Consider the scalability of the time tracking method to accommodate your business's growth. If you plan to expand and hire more employees in the future, ensure that the method can handle increased users and workloads without compromising efficiency or incurring additional costs.

Integration and Compatibility

Evaluate whether the time tracking method integrates well with your existing business systems or tools. Consider compatibility with your payroll software, project management platforms, or other tools you rely on. Seamless integration can streamline processes and data transfer, saving you time and effort.

Cost and Affordability

Assess the cost and affordability of the time tracking method. Look at the pricing structure — whether it's a one-time purchase, subscription-based, or offers a free version — and consider the long-term cost implications for your business. Also, take into account any additional fees, such as for support, upgrades, or integrations.

Remember to align these factors with the specific needs and requirements of your business to ensure that the chosen time tracking method fits your workflow and supports efficient time management for your small business.

Why Small Business Owners Love OnTheClock

With OnTheClock, workers simply clock in and out. At the end of your pay period, we automatically count the hours worked for you. From there, everyone can review their time cards before sending them to your payroll provider.

If you’re an independent contractor or small business owner with less than 3 employees, OnTheClock is free to use. If you’re running a growing business, our software is one of the most affordable options available, with pricing plans designed to scale with you.

The best part? Your first 30 days of OnTheClock are free. Start your free trial now and see why we’re trusted by more than 15,000 businesses and 125,000 employees.

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Written by

OnTheClock Team

OnTheClock is the perfect app for business that want to keep track of their employees' time without spending hours doing it. With OnTheClock, you can forget about the old way of doing things.

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a thought From SHERI on 6/15/2021 ...
reply from OTC - Hi Sheri, when calculating hours worked, the use of decimals are what's typically used. You can use a decimal converter or our employee time clock to help convert decimals into minutes. For example, 8.75 hours would convert to 8 hours and 45 minutes. The .75 is a representation of 75% of an hour (which is 45 minutes). We hope this helps.
a thought From janet m comfort on 5/16/2021 ...
received my first pay check as a substitute stating I had worked 8 hours. I punch in at 9am and cannot punch out until 1:15pm. Why amd I only paid for 8 hours.
reply from OTC - Hi Janet, thanks for reaching out. Based on the time you provided in your comment, 9:00am to 1:15pm would be 4.25 hours. This is assuming that no breaks were deducted. We hope this information is helpful.
a thought From Maira on 4/16/2021 ...
In the section of this article about translating clock-in times to hours and partial hours you give the example that 8:45 should be 8.45 hours. This is incorrect, isn't it? I've always considered that to be 8.75 hours. Am i wrong? If not, correcting these examples might be a good idea. :) Thanks Maira
reply from OTC - Hello Maira, thank you for the great comment. The trick here is the top number, drop an hour, and carry the 13 minutes. This example simply shows how to calculate during using hours/minutes - not decimal conversions. We hope this helps with your question. Have a great day and feel free to share this article on social media to help guide others.
a thought From Cindy Henrie on 1/8/2021 ...
Hi I am having a problem with our old school punch in punch out time clock, I have worked full 24 hr to 36 hr shifts but when I enter my time it calculates as if I have only worked a 12 hr shift, how do i enter this
reply from OTC - Hello Cindy, thanks for the question. We really can't explain how to do this on an older style time clock since we do not know the system. With technology improving business operations, our modern time clock automatically calculates employee hours worked from the time the employee punches in and out. We recommend using our time clock app or recommending it to your employer. We would love to answer any questions you or your employer may have about our time clock system. Please contact us at 888-753-5999. Have a great day.
a thought From Kevin Gazlay on 10/6/2020 ...
a person works day 1 (sun) of the payroll period for 11hrs 15mins @$,/ day two (mon) for 12hrs,00mins @$,/day three (tues) for 10hrs40mins @$,/day 4 (wens) for 10hrs,35mins,(6hrs05mins@$18,hr/4hrs30mins@$ day 5 (thurs) for 10hrs.30mins.@$,/day 6 (fri) for 9hrs.42mins,@$ creating a total gross wage for $1562.04 / is that correct ??? or am i miscaluclating ??? please respond in kind,thx
reply from OTC - Hi Kevin, We are not payroll professionals, but we do offer some free valuable time tracking tools to help with your situation. Please refer to our Free Tools Here. We hope this helps.
a thought From Oksana Berina on 6/20/2020 ...
I worked 80 hours in two weeks. Got paid only for 56. Is that right?
reply from OTC - Hello and thanks for the question. This would depend on when your workweek starts and ends. It also depends when your company's payroll cycle starts and ends. See our blog How to Set Up Pay Periods to Work With Pay Dates for a better understanding how your employer may have their workweek organized. We hope this helps.
a thought From Efraim on 7/8/2019 ...
How to calculate my time starting time is 2:50pm to 12am
reply from OTC - Hello Efraim, here is a link to our free time clock calculator. Feel free to put in your hours worked, including breaks. Thanks for reaching out :)
a thought From Barbara on 4/3/2019 ...
Please help me to figure my hours up to military time. I worked 4:03-11:00pm and I don't understand how my employer came up with 6.95 hours?
reply from OTC - Hi Barbara, Here is a link that allows you to Convert Hours & Minutes to Decimal Hours. We hope this helps.
a thought From Wasif on 3/25/2019 ...
My calculations: 5x12 = $60 20 minutes x 12 = $4 =$64. I work 4pm to 9.20pm. Time card machine calculations: 16:00 - 21:20 = 5.20 5.20 x 12 = $62.40. Can you please help me out why there is difference between my calculations and time card machine calculation?
reply from OTC - Hi Wasif, Perhaps our decimal hours calculator will assist you:
a thought From Debrah Ann Laparan on 3/4/2019 ...
It helps me to understand simple things, very good it helps also the students to understand mathematics
reply from OTC - Hello Debrah, We are very happy to hear we could assist students understand mathematics.
a thought From James on 2/10/2019 ...
Hi at my work i arrive at 4.15 but wen they calculate my hours they start to calculate at 5.00 please i need help to that.
reply from OTC - Hi James, If your employer is using our system to track employees' time, then the Admin on the account may have 'punch rounding' turned on. Have the person who controls the account to contact us and we can assist them. Thank you, OTC Team
a thought From Kay on 12/15/2018 ...
I want to calculate my hours
reply from OTC - Hello Kay, Sign up and start calculating your hours by clicking on the link provided. Hope this helps.
a thought From Eric on 11/2/2018 ...
Hi, what do i do when my employer pays me less than a basic salary every month?
reply from OTC - Hi Eric, Thanks for reaching out to us. Are you being paid less than you should be for your worked hours? You also mention salary, if your on salary then you should paid the same each month. Your gross pay for the year should match your salary contract.
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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