15 July 2021
Calculating your employees’ time cards accurately is crucial to your business. Not only does it ensure you’re paying your employees the right amount, but it also helps you make sure you’re not scheduling anyone for too many or too few hours, and it allows you to understand what staffing levels your business needs to function at its best.
New small business owners may find that calculating time cards manually works well for them initially, especially if they have a small number of hourly employees and few work hours to track. Even more established businesses that are using Excel spreadsheets, timesheet calculators, or other time tracking methods for calculating hours should know how the math works. That way, even with a computer, you’ll be able to spot and correct any inevitable errors.
Once you understand how to do manual time card calculations, it’s also important to know what problems you may face with that method, such as how much time it takes and how easy it can be for employees to commit time theft. Then we’ll show you how time and attendance software can address those issues and make the entire process a breeze.
Manually tracking employee hours by hand is an old method, but it works. Here’s how to do it.
Convert an employee’s start and end hours for the day, as well as any unpaid break time, to 24-hour time, also known as military time.
For example, your employee began working at 9:22 a.m., took a lunch break from 12:30-1:15 p.m., and ended their day at 5:08 p.m. In a 24-hour time span, the hours past 12 p.m. must be converted, so 1:15 p.m. becomes 13:15, and 5:08 p.m. becomes 17:08.
Convert the minutes into decimal format—instead of minutes out of 60, make them percentages of 100. To do this, you can either use a chart or simply divide the minutes by 60.
In our example, this means your employee’s clock-in and clock-out times become 09.37 and 12.50 for the first half of their shift and 13.25 and 17.13 for the second half of their shift.
Subtract the employee’s shift start times from the end times.
12.50 – 09.37 = 03.13 and 17.13 – 13.25 = 03.88
Add the working hours from step three together to get the total for the day.
03.13 + 03.88 = 07.01
So your employee worked a little over seven hours total.
Repeat these steps for each day worked within the pay period, and add all the days together for the total hours the employee worked within the workweek. Multiply the total by their hourly rate to determine their gross pay before deductions.
If an employee works overtime and is paid an overtime rate, you’ll want to calculate and note it separately to make sure they receive the correct overtime pay.
While doing the math by hand works when calculating employee hours, there are also plenty of reasons to be wary of it, from the amount of time it takes to the ways it makes your business vulnerable to theft.
Calculating manual time cards requires either the manager or employees to keep accurate physical time cards, which can be damaged or destroyed. The time cards and the documents you use to calculate them must be stored securely, taking up office or storage space. Accessing these documents for auditing or other reasons can be difficult and time-consuming, particularly if the records aren’t kept in an organized manner.
You may not mind having to take the time to calculate time cards manually, but if you have more than a few employees, it’s going to take a while to do the calculations and complete your payroll duties.
If employee time cards are handwritten or if your time clock runs out of ink, there may be times recorded that are illegible, which means you need to spend time contacting employees or managers to figure out what the times are supposed to be. Correcting mistakes also takes extra time since you have to track down the physical timesheets and redo the math.
Time theft is easy for employees to commit when you use paper time cards or calculate time by hand, and it’s difficult for employers to track. Employees can commit time theft in a number of ways, such as by saying they worked more regular hours than they actually did, by clocking in and then not starting work for 20 minutes, or by having a friend at work clock them in when they aren’t there, so people don’t know they’re late.
This could also happen unintentionally. If an employee forgets their clock-in or clock-out times, you have to rely on their memory or on their manager or co-workers remembering the number of hours the employee worked, which could easily lead to inaccuracies that result in employees being overpaid or underpaid.
When you calculate your employees’ time cards manually, there’s more wiggle room for employers to commit fraud. This can happen accidentally, for example, if an employer loses track of the number of hours an employee worked or intentionally if a manager is skimming time off employees’ hours to stay in budget. Either way, shorting employees on their hours worked or overtime pay is wrong, and for companies, it can result in overtime rule violations, penalties, and fines.
A general lack of oversight and control is another negative. When you need to check all your employees’ hours by hand, it’s hard to know who’s about to hit the max number of hours they can work, if you’re staying within your budget for staffing costs, or what the optimal staffing levels are. These are things you want to be able to know with a quick look.
By using a digital time and attendance solution, you can improve your business by ensuring employee time cards are accurate, secure, and easy.
With Workforce.com’s time and attendance software, there are no physical time cards or recordkeeping to track. Everything is done through the app, making accessing time card records simple. Because all the information is kept in a secure online system, you don’t have to worry about maintaining organized files in an office or fear they’ll get damaged.
When your employees clock in with Workforce.com, they do so either on an app on their mobile device or on a tablet kept at their workplace. Notifications can prompt them when it’s time to clock in or clock out, and their hours are calculated automatically, so you never have to concern yourself with illegible handwritten time cards, employees forgetting to clock in or out, or having to calculate time cards by hand.
Workforce.com’s software’s electronic photo verification controls make it next to impossible for employees to have their co-workers punch in for them, and system controls can prevent employees from clocking in early themselves, reducing the possibility of employee time theft. Labor compliance reporting helps make sure employers are following labor laws, such as the Fair Labor Standards Act, to prevent fraud and protect your business.
The flexibility of Workforce.com’s software and mobile app helps you track your employees’ time easily from wherever you—or they—are. If your employees aren’t tied to a retail location, you can use GPS to track their location remotely, see if they’re on the job or somewhere they aren’t supposed to be, and set restrictions for clocking in or out on the job site.
With these tools, you can have detailed oversight of your employees’ digital time cards, whether you’re at your desk or on the move. Workforce.com’s platform allows you to easily see who’s nearing their maximum working hours for the week, who is nearing overtime hours, easily swap employee shifts should the need arise, and know at a glance what staffing levels are optimal.
Time and attendance software takes the headache out of calculating time cards for your employees, resulting in more accurate payroll spending while making scheduling easier. Workforce.com has automatic systems in place to help you streamline your processes, save time, and protect your bottom line. Book your demo today.
Content Manager Note: If you don’t want to link to external sources for the 12-to-24 time and time-to-decimal charts in the steps, I’ve included some very basic looking versions below that you could upload to the media gallery on the back end of your website then link to in the article.