How to Calculate Hours Worked in 6 Steps (+ a Better Method)

How to Calculate Hours Worked in 6 Steps (+ A Better Method)

Often businesses keep track of hours worked manually. This means using spreadsheets, paper forms, or some type of template to log and track hours worked. With this type of time tracking method, you often still need to calculate employee hours to get accurate totals for things like payroll.

This post includes a 6-step walkthrough on how to calculate hours worked manually, so you can make sure you’re calculating correctly. 

But, as we’ll see, there are significant drawbacks to calculating hours worked this way. 

Specifically, it’s a lot of manual and tedious calculations. You need to convert your time into military time (as most employees aren’t going to track their hours in military time, no matter how many times you remind them), and add and subtract. Sometimes companies will “automate” this part by using a spreadsheet, where they can input start time, end time, break times, and their spreadsheet will give them a total of hours worked. But that leads to other problems, such as:

  • Keeping an accurate record of each employee’s timesheet. Manual self-reporting is full of both accidental time keeping mistakes and intentional ones.
  • Keeping track of paid time off (which can often accrue based on hours worked).
  • Keeping track of overtime (and preventing unsanctioned overtime before it happens).

If those issues above sound like a pain for your business, you can skip ahead to learn about our better method for calculating hours worked (accurately and efficiently every time).

Note: If you prefer to learn by doing, you can sign up for a free 14-day trial where you can use our software to create work schedules, track employee punches, calculate hours worked, integrate with your payroll provider, and much more. 

How to Calculate Hours Worked Manually in 6 Steps

A payroll binder with a calculator, pen, folders and a worksheet.

Step 1: Record Your Start and End Times

On the days you work, you need to record your start and end times. In this example, we’ll use 8:30 a.m. as the start time and 4:45 p.m. as the end time.

Depending on where you work, your time record will need to be precise to the minute and/or added at the moment of you entering/leaving the workplace to avoid time theft like buddy punching (an employee punching in the time for a coworker). On the other hand, some businesses will allow you to record this at home, on different days, or only need you to submit a general range as long as that fits your required hours. Both instances are problematic for two key reasons:

  • Employees may intentionally mis-report their work times, either to increase their total hours or to avoid being pinged for tardiness.
  • Employees may accidentally forget to clock in or out. While this is not malicious, it’s still a form of time theft, especially if it goes unnoticed and you end up paying an employee for hours they didn’t work.

The section following these steps will talk about how this is one of the biggest drawbacks solved by using time tracking software. In the meantime, let’s continue with the next step in calculating our work hours manually.  

Step 2: Convert Your Time into Military Time

Military time is a way to report your time in 24 hours instead of using the 12-hour format (a.m. and p.m.). 

To convert your time into military time, keep the morning hours the same, and add 12 hours to everything starting from 1 p.m. to midnight (12 a.m. can be reported as 00:00 or 24:00).

You want to convert your start time and end time into military time so it’s easy to calculate the number of hours worked later through subtraction. 

In our example, 8:30 a.m. in military time is 08:30 (or 0830, without the colon) and 4:45 p.m. in military time is 16:45 (or 1645).

Step 3: Subtract Start Time from End Time

Next, you want to calculate your total hours of the day by subtracting your start time from your end time. This is when military time comes in handy as it’s easy to subtract 08:30 from 16:45 (or 830 from 1645).

In doing so, we get our total time as 8:15 or 8 hours 15 minutes.

Step 4: Subtract Unpaid Break Time

If you have unpaid break time like a lunch break, you’ll need to subtract that from the work hours you just calculated. 

Say the person in our example had a 30-minute unpaid lunch break. Their actual work hours will then be:

8:15 – 0:30 = 7:45 (7 hrs 45 mins)

Step 5: Convert Time into Decimals

Once you’ve got your work hours ready, you want to convert them into a decimal format so it’s easy to add up those hours later as you’re calculating your work time for your pay period.

To convert your work hours into decimals, you keep your hour number the same and divide your minute number by 60, then add the result to the hour number.

To illustrate, the actual number of work hours we have here is 7 hours 45 minutes. Divide 45 by 60, we get 0.75. Add it to 7, we get 7.75 as our hours in decimal format.

Step 6: Calculate Your Work Hours for Your Pay Period

Repeat Steps 1 through 5 for each day you work, and at the end of your pay period, calculate your total work hours by adding up all the numbers you have. Multiply that by your hourly rate and you get your gross pay.

To make it simple, let’s say our employee in the example worked the same 7.75 hours for 5 days and their pay period is set up as weekly. Their weekly hours would be:

 7.75 x 5 = 38.75 hours

If their hourly rate were $20/hour, their gross pay for that week would be:

 38.75 x 20 = $775

Make sure you note down your overtime hours or holiday pay as you may get paid a different amount in these instances. 

For any employee covered by the Fair Labor Standards Act (FLSA), overtime is defined as any hours worked over 40 in a workweek, and overtime pay is at least 1.5 times the regular pay rate. If you’re not a full-time employee, you may get paid a holiday premium pay when your shift falls on a holiday (for more information, read here).  

If you don’t want to go through these steps for every single pay period, you can use a work hours calculator like Buddy Punch’s free timecard calculator. Add your start and end time, break time, overtime (if applicable), and your hourly wage, and the Buddy Punch calculator will automatically calculate your total work hours as well as your total gross pay for that pay period.

If you get paid biweekly, you can click on “14 Days” to calculate 14 days’ worth of time.

Buddy Punch's Free Online Time Card Calculator

Instead of a work hours calculator, sometimes businesses try to simplify the above by using a timesheet template, which lets you organize and even automatically calculate hours worked (once you’ve input the data):

Buddy Punch's timesheet template

But these manual methods are inefficient and often lead to inaccurate total work hours, which adversely affects paid time off balances, payroll, and your overall time tracking record.

In short, it doesn’t matter if you’re using an Excel template or a calculator, you still are going to have to deal with:

  • Manually calculating your hours. You and your team need to track start and end times, break times and then calculate the totals hours, then repeat — again and again. This is time-consuming, especially when you need to handle large volumes of data or complex schedules. This is dozens of times (or more) worse if you’re calculating your employees’ hours, as you’ll need to go through and process every employee’s timecard — not to mention the back-and-forth likely incurred if there’s a mistake in their hours.
  • Time tracking errors. Relying on manual hours entry can lead to errors — people may struggle to account for their overtime, break time or irregular work schedules.
  • A lack of employee accountability. With manual processes, employers can’t verify the hours employees list on their timesheets, leaving your business open to time theft.
  • A lack of real-time data as your report only shows you patterns based on past hours tracked. You won’t know if someone is approaching overtime until after the fact. 

With these disadvantages, using time tracking software like Buddy Bunch is the better alternative for most businesses. 

If you need an accurate time reporting system for your business, read on.

How to Accurately Calculate Hours Worked for Your Team

Buddy Punch Interface

Buddy Punch is an employee time tracking system that works as a web app on computers (both Windows and Mac) or a mobile app on phones and tablets (for both Android and iOS). It helps calculate accurate hours worked across your team — and more.

Buddy Punch offers businesses:

  • Accurate time tracking and timecard editing. With Buddy Punch, employees can clock in and out digitally, making it easy for them to record their exact work time. You can also add, edit or delete a time entry as needed. 
  • Accountability features. Buddy Punch helps prevent time theft with accountability features like GPS tracking, geofencing, IP address locking, punch limiting, and more.
  • Easy team scheduling. With Buddy Punch, you can create schedules in minutes, ensuring shifts are adequately covered and your staff knows exactly when to work.
  • Payroll software and integrations. You can run payroll right within Buddy Punch, or integrate Buddy Punch with your current payroll provider. Either way, using Buddy Punch helps simplify payroll and gets your team paid on time.

Let’s take a closer look at each feature and how it’ll make calculating hours worked for your team easier and more accurate.

Clock In and Clock Out Reminders

With Buddy Punch’s Clock In and Clock Out Reminders, you can prevent employees from forgetting to punch in or out when they start/end work. Say a team member fails to punch in within “X” minutes of their shift beginning. They’ll then receive a reminder via email or text alerting them to clock in.

New Notifications: Alex Wizard working overtime Walker inc

All regular hours, time off, and overtime are automatically calculated. If an employee is nearing their maximum hours for the day or week, you can set up emails or mobile notifications so you can adjust your schedule accordingly. 

New Notifications: Eric Pena is working overtime

Similarly, you can set up overtime alerts, so you’re alerted if any employees are approaching overtime.

Geofencing

Geofencing

Geofencing sets up a specific radius from your business site. Your employees can only clock in or out within this radius. Employees who punch time outside a geofence will receive an error along with a map showing their current location and the geofence’s location.

This feature is useful if you want to make sure employees report their start and end time correctly and that they are at work when they say they are — something you can’t guarantee with physical timesheets or work-hour reporting software that doesn’t require employees to report their exact start and end time. 

Geofences use GPS coordinates, so employees must use the Buddy Punch app if assigned one.

Punch Limiting

Limit punching in/out

Punch Limiting minimizes time theft as it allows you to prevent employees from punching in early or out late to get a little extra time.

To add a new Punch Limiting rule, you can specify the time frame your employees can clock in and out, say 8 a.m. to 5 p.m. Any employee who punches in before 8 or punches out after 5 will receive an error message.

Punch Limiting works well with Scheduling (more on this below) as you can use both features to set up rules to let employees clock in early or clock out late, within a certain frame:

Add a new punch limiting rule

IP Address Locking

Buddy Punch’s IP Address Locking ensures employees are at the right location when they clock in and out. 

Edit IP Address Lock in Buddy Punch

With this feature, you can restrict punches to a device at a job location, or require employees to connect to a centralized WiFi network before punching in and out. This is especially useful when you have multiple job sites or when your employees are working remotely, which means you can’t be sure if their start and end times are reported correctly.

GPS Tracking

With GPS tracking, you’ll know where your employees are (in real time) when they clock in and out. 

Punch Map for Betty Schuh

You can view GPS punch-ins for an individual employee from their timecard, or you can get an overview of all employees on your dashboard. This is another way you’ll know whether an employee is consistently running late for work or not.

Like the other accountability features, this is optional. You can turn it on or off for specific employees if needed. 

GPS on Punches

Edit Timecards Easily

Still, we know sometimes a business will just need to edit a timecard. With Buddy Punch, you can easily log in and view your team’s timecards.

To add a time entry, first select whose timecard you want to view. You can then choose the “Add New” option followed by “Time Entry” on your dashboard and add the shift for that employee.

Where to add a new time entry in Buddy Punch

If you need to edit or delete a time entry, click the “Edit” button (next to “Add New”). Choose the trash button at the far right of the entry if you need to delete it, or choose the “Edit” button under the “Time” column.

Where to edit a shift in Buddy Punch

You can also export time tracking data like employee hours or overtime as a PDF file or an Excel spreadsheet if needed.

Excel timesheet

Create Employee Schedules

Ensuring proper and accurate time tracking starts with having a clear schedule. Buddy Punch’s Scheduling feature saves you time reconciling discrepancies between your employee schedule and their physical timesheets.

Creating new employee schedules is easy. Just add a new shift to the schedule, then you can drag and drop the shift anywhere.

Assigning Shifts in Buddy Punch: Assign Shift to Jim Iverson

For employees who work the same (or mostly the same) schedule every week, you can use Buddy Punch’s Repeating/Recurring Shifts functionality:

Recurring and Repeating Shifts in Buddy Punch

Buddy Punch also allows you to add employee availability or let employees fill out their own availability, so people know when someone can or can’t work.

Employee Availability Schedule

If you need to notify your employees of upcoming shifts or schedule changes, Buddy Punch does that for you as well.

Learn more about creating a good work schedule.

Run Payroll with Buddy Punch

Buddy Punch offers a native payroll processing system as well as integrations with major payroll providers.

As Buddy Punch helps you accurately track your employees’ work hours, we can also help you issue the right paycheck for each employee when it comes time to run payroll. Plus, you’ll also save time and money as you only need to use one system for both payroll and time tracking management.

Running payroll with Buddy Punch is simple. After choosing “Run Payroll” from the top navigation, you can select the pay period you need, click “Run Report” to populate hours, and then click “Import Time Into Payroll”.

Easily Import Time into Payroll with Buddy Punch

You can add a custom pay rate, add additional earnings, or enter tax-free reimbursements if needed.

If everything looks good, click “Continue” and then “Submit Payroll”. 

Reimport Time into Payroll: Submit Payroll

If you prefer to work with your current payroll provider, Buddy Punch offers integrations with multiple payroll systems:

Payroll integration options include QuickBooks, Zapier, Paychex and more.

Customer Reviews of Buddy Punch

Buddy Punch on Capterra

At the time of writing, Buddy Punch has 950+ reviews on Capterra and is rated 4.8 out of 5 stars. Here’s what our customers say about how Buddy Punch helps them track employee hours:

BuddyPunch makes employee time tracking very easy. Employees just need to be within a geofence (if one is set up) log in and punch in/punch out. They don’t have to jump through endless steps for something that should be straightforward. The user interface is also very user friendly.

Read the review here. 

Easy to clock in from anywhere and still manage how much time you’ve worked in a day. Easily tells you when you’ve gone past 8 hrs, and also great for seeing when your team members are clocked in or out.

Read the review here.

When I made user errors (like forgetting to clock out) the software had built in measures to rectify my mistake. I forgot to punch out, and it has a feature to leave notes for your boss. You can also edit a punch after you make a mistake (just needs to be approved by your boss) So if you get excited and start working before you clock in? No problem. Just punch in and edit the time to an earlier time of the day. Then wait for your boss to approve the changes. It says I can review punches from previous weeks, but I haven’t had time to explore that feature yet.

Read the review here.

So far, the Buddy Punch App has saved me time with the weekly payroll timecards. I don’t have to depend on the employee turning in their timecard in person on Monday morning. It is especially helpful because they work on multiple job sites and not in the office.

Read the review here.

We have been using Buddy Punch since 2015. Prior to Buddy Punch we were using an Excel spreadsheet for time keeping. We use Buddy Punch as a time clock for daily in/out and breaks. We use the PTO accrual system and PTO tracker. Buddy Punch is easy to use and easy to figure out. Customer service is responsive. The few times I’ve needed help (very rare) they were super responsive and made sure my problem was completely solved. Staff loves the mobile app. It makes punching in/out easy so staff can punch in as they enter the building because inevitably they will be waylaid with questions before they even get to their computer. Buddy Punch is constantly upgrading and improving. There are many ‘bells and whistles’ that we don’t even use- but it is nice to know they are there if we ever need them. I would recommend Buddy Punch to anyone.

Read the review here.

For more information on how Buddy Punch can help your business, check out our:

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