How to calculate hours worked by the employees? Perhaps, one of the most important tasks in the neverending management list of an HR Manager. Yet, it is often left for the end or not paid heed to at all in a day full of managing people, celebrating their victories and handling their grievances. It is an important metric that is useful in measuring productivity.

Being overly particular about the calculation of work hours may lead to micromanagement. But, ignoring the task completely can impact productivity and payrolling. It may also lead to issues such as employee time theft.

To avoid such issues, it is important to know how to calculate hours worked.

In this blog, we will discuss how to count hours worked, why it is important, the best tools to measure it, and more.

How to Calculate Hours Worked: What are Work Hours?

Work hours/ a workday is defined by the United States Department of Labor as:

“Workday”, in general, means the period between the time on any particular day when such an employee commences his/her “principal activity” and the time on that day at which he/she ceases such principal activity or activities. The workday may therefore be longer than the employee’s scheduled shift, hours, tour of duty, or production line time.

These hours are usually recorded on time cards, either electronically or physically, depending on the industry and organization standards. It is a legal document and can be produced as evidence if required.

It is important to record work hours because it is a metric against which work can be measured. How to calculate hours worked? There are many online tools available to count hours worked. But first, let’s understand the different types of work hours.

What are the Different Types of Work Hours?

Before you figure out how to calculate work hours, it is important to understand the basic types of work hour arrangements. There are three; full-time, part-time, and overtime. Let’s take a closer look at each of them.

Full-Time

There was a time when a 60-hour workweek was considered normal. Things evolved, and the Fair Labor Standards Act came into existence. Eventually, a 40-hour work was decided upon. Nowadays, 32-hour work weeks or a four-day workweek are also being considered. Employees should be given an opportunity to balance work and life and shorter workdays give them that.

With time, productivity is being given preference over the actual number of hours worked. But that does not mean recording work hours is a redundant practice.

Part-Time

A part-time work arrangement is one wherein the employees are not legally bound to serve specific hours in the organization. Further, it depends on the company and the specific contract it has entered with the employee and what constitutes ‘part-time.’ Some examples of part-time arrangements are freelancing contracts, zero-hour contracts, and more. As far as benefits are concerned, it depends on the company, whether they wish to extend any to part-time employees.

Overtime

Overtime is when the employee works beyond the stipulated hours and is entitled to extra pay. Usually, the standard pay for those who work overtime hours is called ‘time and a half.’ It means that an employee is entitled to an overtime rate that is 1.5 times the regular hourly rate.

How to Calculate Hours Worked?

how to calculate hours worked

Step 1:
Choose a Method of Recording

When you are trying to figure out how to calculate hours worked, the first step is to choose how you would record the hours. You can either do it via physical timesheets, or you can try tools such as AttendanceBot. You can even have a computer-based tracking system in-built in your intranet.

Step 2:
Choose a Time Format

The second step is choosing your time format. This means whether you wish to follow a 12-hour format or a 24-hour one. Many enterprises prefer a 24-hour format because it is easier while calculating work hours. You have to deduct the in-time from the out-time and you have the hours worked with you. Of course, there are other factors, such as the number of work breaks, that can be accounted for depending on the employer’s management style.

Step 3:
Create a Rounding Policy

The US Department of Labor has an interesting solution to employees never being precise with punching in and out which is called a rounding policy. The department sets a window of fifteen minutes to decide whether or not an employee is on time. This is done because instances of employees coming in at the exact start time and exiting at the dot of the hour are extremely rare.

For instance, if your office hours are 1100 hours to 2000 hours, the chances of everyone clocking in at 1100 and clocking out at 2000 are extremely rare. On the other hand, people will be coming in at 1110, 1115, and even 1125. In such cases, anyone who arrives at 1115 or before would be marked ‘on time,’ while anyone later than that would be marked ‘late’. The same rule applies to punching out too.

Step 4:
Create a Table of Weekly Hours

Create a separate record for each employee and calculate their weekly hours. This means that you create a weekly record of in-time and out-time of the employee and their work hours. By adding up daily hours, you’d know how many hours a week the employee has served and whether it is in sync with the company’s weekly hour mandates.

Step 5:
Create Work Hour Categories

If you have one employee working in different departments in two different capacities, calculate hours separately for both jobs. The reason being that both the jobs may require different levels of commitment and even different levels of effort and time.

8 Effective Tools on How to Calculate Hours Worked

We have established that how to calculate hours worked is important. But how to do it? Let us list a few tools that could help.

#1 Microsoft Excel

This one is perhaps the most used way of calculating hours worked. It is a mix of manual data entry and electronic record keeping where someone will update the sheet periodically. However, the drawback is that it gets unwieldy past a small number of employees.

#2 AttendanceBot

Another reliable mode tracking work hours is by using the Time Tracking functionalities of Attendance Bot. AttendanceBot lives within team collaboration software like Slack, Microsoft Team and Google Hangouts. An employee is only required to message ‘in’ or ‘out’ to the bot to record punches. Additionally, AttendanceBot also sends timely reminders, in case the employee forgets to record attendance on any given day.

#3 The Calculator

You can log on to The Calculator and track the working hours of the employees. It can also calculate overtime, if any, and helps your payroll accordingly. This is again an excellent option for small business owners who do not have more than 5 employees.

The data that this tool takes into account are:

  • Regular Pay Rates
  • Overtime Rules Overtime Rates
  • Punches
  • Breaks

#4 Trisun Soft

If you want the convenience of Microsoft Excel in a better format that is suitable for a larger organization, Trisun Soft should be your pick. You can not only calculate work hours but also calculate how many hours each task takes. You can compare how many hours different employees take for the same task or even the same employee doing the same task on separate days.

#5 Red Cort

Another useful time-recording tool at work can be the Red Cort. It’s simple and best suited for small organizations and freelancers who do not have a large number of people to manage.

#6 Calculator.net

With Calculator.net, you can choose between a 12-hour clock and a 24-hour clock and then record the hours worked accordingly as the employees punch in and out. You can even figure out weekly hours worked by putting in time in and out for separate days.

#7 Time Clock Whiz

Time Clock Whiz is an advanced option and is especially useful for large organizations. It comes with various features such as calculating gross wages, switching to a bi-weekly calendar, time card calculator, work hours calculator, and more. Further, it accurately records attendance and the number of hours worked by an employee. If you feel that you cannot keep a track of remote employees, this is something you can use.

#8 On the Clock

On the Clock gives you multiple features and the option of adding multiple employees to the board (depending on the version you are using). Employees then punch in and punch out and the software auto-generates time cards. It has an in-built GPS location system that prevents the practice of time theft and buddy punching. HR departments can easily review timesheets and forward payroll details.

#9 Boomr

Boomr hours comes with multiple options and features to calculate the hours worked. It also has the option to enter breaks and lunch timings. The work jours calculator takes all the breaks into consideration at the time of calculating hours for payroll. There are also options to reset the settings, print the timesheet report and share the timesheets with respective associates.

#10 T-sheets

If you wish to create weekly or fortnightly employee timesheets, with the lunch breaks included, T-sheets is a good work hours calculator. It is useful for both employers and employees. The former can calculate their expected pay while the latter can utilize the information about overtime and break time for better management of the team.

#11 Connect Team

Buddy punching is one of the most annoying employee theft practices. It can be avoided using Connect Team that uses a unique GPS feature to track the location of the person who is punching in/out. Further, the tool provides all the data in an insight format.

#12 Toggl

Toggl is a free and easy time calculating tool that helps tally and print the hours worked and the payment due thereof. It can be used by both employees and employers depending on the information they wish to fetch.

#13 On the Clock

On the Clock is a useful work hours calculator because it mostly requires punching in the relevant and accurate information. Employees enter the details of clocking in and clocking out times, along with the breaks taken in between. On the basis of the entered information, the tool generates the number of hours worked in the specific pay period.

What are the Other Methods on How to Calculate Hours Worked?

how to calculate hours worked

Recording or calculating work hours should not come at the cost of employee privacy and comfort. It should also not amount to micromanagement. Keeping that in mind, here are a few other alternatives to try:

#1 Track Social Media Usage

This may not be the best practice but can give you an idea if an employee is spending too much time on social media during work hours.

#2 Take Feedback from Co-workers

Taking feedback from peers would help you understand the employee better. It could help eliminate any bias that may be hampering employee relationships within the organization.

#3 Create KPIs Linking Performance with Work Hours

Use software to create electronic timesheets and then link this data to employee performance. This is one way of measuring productivity, especially in remote employees.

#4 Connect Productivity to Sales

Connecting sales and productivity might sound a little impractical but is quite useful, especially in businesses where the majority of work is sales. It can even be implemented as a separate technique in the sales department of the organizations. By linking productivity with sales and gauging the hours worked the HR can identify the weak links and provide them with the required tools and training to excel.

What are the Advantages of Knowing How to Calculate Hours Worked?

Calculating work hours and having a timesheet is advantageous in many ways. Here are the pros:

  • Calculating work hours aids better decision-making with respect to employees
  • Calculation of different pay rates is easier
  • The practice increases overall productivity and ensures better utilization of work hours
  • Work hour calculations help build discipline
  • Knowing how to calculate work hours saves up quite a lot of funds

Do you Need to Know How to Calculate Hours Worked?

Knowing how to calculate hours worked helps in better time management and improved productivity.

What mode of work hours calculation is followed at your workplace? Do share with us at @HarmonizeHQ.

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