How To Calculate Minutes For Payroll
Do you need to know how to calculate minutes for payroll? We have got you covered. In this short guide, we are going to break down how to calculate time for payroll manually and provide you with a practical alternative to plugging numbers into equations. To pay employees working partial hours, you must know how to convert minutes for payroll. Let’s dive straight in.
How To Calculate Minutes For Payroll
If you do not take minutes into account when calculating employee pay, this can lead to a whole range of issues further down the line. To save yourself from the hassle of more work on the backend, you need to know how to calculate minutes for payroll or find tools to do the heavy lifting for you. Before we explore a useful tool, here’s some good old-fashioned mathematics.
Step 1 – Calculate Total Working Hours & Minutes
Underpaying or overpaying employees is every HR team’s worst nightmare. To get the right figures for payroll, you first need to decide whether to use actual hours worked or rounded hours worked. You should then add up the total working hours and minutes. Here is an example:
- Monday: 7 hours and 15 minutes
- Tuesday: 7 hours and 30 minutes
- Wednesday: 7 hours and 10 minutes
- Thursday: 7 hours and 11 minutes
- Friday: 7 hours and 10 minutes
Total hours worked: 7 + 7 + 7 + 7 + 7 = 35 hours
Total minutes worked: 15 + 30 + 10 + 11 + 10 = 76
The employee’s total minutes worked equals 76. You can convert 60 of the 76 minutes into one hour using the following equation:
76 minutes – 60 minutes (1 hour) = 16 minutes
You can now add the converted minutes to your total hours.
The employee worked 36 hours and 16 minutes last week.
Step 2 – Convert These Minutes To Decimals
Now you need to convert the minutes worked to decimals. You can do this by dividing the minutes worked by 60 using the following equation:
16 minutes worked / 60 = 0.26
Last week, the employee worked 36.26 hours. Easy, right? There’s one more step.
Step 3 – Multiply Time Calculated & Wage Rate
Once you have converted the employee’s time, you now need to work out how much you need to pay them. You can do this using the following equation:
$10.00 hourly rate X 60.25 hours worked = $602.50
This means the employee’s total wages before payroll taxes and other deductions for this specific pay period is $602.50.
By converting the minutes to decimals in the earlier step of this process, it makes calculating the employee’s gross pay far easier.
Can you round payroll hours?
According to Federal law, employers are given the option to calculate employee wages using rounded hours. If you choose to go down this route, you must know how to round employee hours correctly to remain compliant with the law. Before making decisions on how you round payroll hours for employees, we would recommend seeking relevant legal advice.
Federal law allows you to round an employee’s hourly wage to the nearest quarter of an hour – which is 15 minutes. When your workforce clock in at any point before or after a quarter of an hour, you may need to round the pay up or down.
As an employer, you are only allowed to round up to the next quarter if the time is 8 to 14 minutes past the previous quarter.
On the flip side, if your employee’s time is from 1 to 7 minutes past the previous quarter, you must round down.
Rounding Hours Example
Here is an example of rounding hours for payroll calculations:
The employee starts work at 9:04 am and clocks out at 5:12 pm. They decided not to take a lunch break on this particular day.
When it comes to payroll time conversion, they worked 8 hours and 8 minutes. Although, the rounded hours will vary.
The time of 9:04 am must get rounded down to 9:00 am.
The time of 5:12 pm must get rounded up to 5:15 pm.
With this in mind, the rounded time is 8 hours and 15 minutes.
You can remember the rules on rounding payroll hours with this short and sweet summary:
- Round down: The time is less than 7 minutes past the quarter (1 – 7).
- Round up: The time is more than 7 minutes past the quarter (8+).
Rather than relying on this article for advice, you should seek guidance from qualified HR professionals with extensive knowledge on how to legally measure time for hourly employees.
How long does payroll take to process?
While the process of reading timesheets and adding up employee hours is easy enough, completing this manually is not scalable. Attempting to do this manually is a recipe for disaster. At the same time, using Excel or Google Sheets to calculate decimal hours can also present scalability issues. Instead, you should consider embracing time clock software.
How To Calculate Time For Payroll
Forget about using time conversion charts to calculate hours worked in decimal form. With Buddy Punch in your corner, you can use our online punch clock to simplify payroll and streamline repetitive processes. Our intuitive platform enables you to easily track employee time, no matter where they are located – so you can stay on top of employee attendance.
The best bit? Everything on Buddy Punch updates in real-time. When employees clock in and out, this data is instantly available on the platform. Buddy Punch is a game-changer for HR teams looking to radically simplify and centralize their employee time tracking processes. You can run customizable reports to track when employees are working over different time periods.
Buddy Punch perfectly integrates with popular payroll software solutions to provide a seamless experience for HR and finance teams. Are you ready to get started? Take Buddy Punch for a test drive today with a free trial.
Other posts you might like:
6 Best Time Clock Software & Apps (In-Depth Look)
5 Free Online Time Clock Software for Employees (And a Paid Option)
6 Best Timesheet Apps & Software [In-Depth Breakdown]
