How to Calculate Hours Worked

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. 


Picture of an old school time clock.

2 Methods for Calculating Hours Worked 

There are a couple of different methods for calculating hours worked. The first is manually calculating hours. The second is time clock software.


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

To figure out how many hours employees work, you need a process to collect this information from workers before each pay period. From there, you can find the total for payroll. 

Example of how to calculate total hours worked

First, you’ll need a start and end time. Let’s use a start time of 8:45 AM and an end time of 3:45 PM as an example. 

  1. Convert all times to a 24-hour clock (military time):
  • Convert 8:45 am to 08:45 hours
  • Convert 3:45 pm to 15:45 hours
  1. Next, subtract the start time from the end time.
  2. You have the actual hours and minutes worked for the day.


math example for time card calculations.

It’s critical to ensure your math is accurate, as any human error can lead to massive costs. Bad data costs businesses $12.9 million per year according to a report from Gartner.

How to Calculate Employee Hours Using Software

You can use software to streamline the process of calculating hours worked. Make sure you enter all the right values for hourly rates and an overtime rate if you have one. Once you’ve done that, you can go on to calculating wages.


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 time worked by wage to find the gross pay.  

For example, if an employee works 8:30 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.

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


Minute to Decimal Value Conversion Chart

 minutes to decimal conversion 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 different time clock calculators:

Time Clock Software for Tracking Employee Hours

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

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

Demystify the Process of Calculating Hours Worked

Don’t leave records of hours tracked and wages paid up to chance. Learn more about what OnTheClock can do for your business and for 30 days. If you only have one or two employees for your business, you can use OnTheClock at no charge.


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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