How to effectively calculate working hours with modern tools

[jrineakter]

Your new team member, eager to prove himself, stays late to finish his tasks. However, when payday comes around, his overtime hours are not reflected, causing a mix of frustration and confusion.

Does this sound familiar?

Accurately calculating hours worked is not just about tracking, but about building trust and ensuring that every minute of effort is recognized and rewarded.

Whether you run a small business or a large organization, getting your employees' hours right is essential.

In this blog, we will explore how to calculate hours and ensure accurate compensation, covering various work hour calculation methods and tools.

Understanding working hours
When we talk about working hours, we are referring to the total time an employee or contractor works – or is scheduled to work – within a specific period, such as a day, week or month.

Under the U.S. Fair Labor costa rica number data Standards Act (FLSA) , working time includes actual time spent on work-related activities for which employees are required to be compensated.

While not all organizations need to track hours (especially if they don't pay hourly), companies that work with freelancers, contractors, construction workers, or part-time employees should be diligent with their calculations.

Accurate time tracking is crucial to understanding your team’s productivity and your company’s efficiency. When you have a clear idea of ​​how time is spent, you can better gauge performance, identify areas for improvement, and streamline operations.

**Read also: How many hours should you work per week to avoid burnout?

Steps to calculate hours worked
Let's walk through the steps to calculate an employee's hours worked in a simple and effective way to ensure everything adds up correctly.

Step 1: Determine start and end times
To track time accurately, start by recording the exact start and end times of each work period. You can use a time clock, a digital computer program, or even a manual stopwatch—whatever works best for you.

The key is to make sure that the tracking method provides accurate data and takes into account overtime or unpaid breaks based on your employment contract.

Step 2: Convert time formats for clarity
To simplify calculations, convert the start and end times to military time or 24-hour format. This means that 9:00 AM becomes 09:00, and 17:00 PM becomes 17:00.

The 24-hour format eliminates confusion between AM and PM, making subtraction easier without errors. Converting hours to this format ensures clarity when subtracting beginning hours from end hours.

Step 3: Subtract the start time from the end time
With the hours converted, subtract the start time from the end time to calculate the total hours worked.

If an employee works from 09:00 to 17:00, you simply subtract 09:00 from 17:00, which results in 8 hours. This step gives you the total number of hours worked in a given period.

Step 4: Counting the break time
Next, subtract unpaid breaks from the total hours worked.

For example, if the employee takes a 30-minute lunch break during their 8-hour shift, subtract those 30 minutes from the total hours worked.

Thus, if the average number of hours worked in the initial calculation was 8 hours, after accounting for the 30-minute break, the adjusted total would be 7.5 hours.

Step 5: Convert the final result to decimal format
To make payroll calculations easier, convert total hours worked to decimal format.

So, if an employee works 7 hours and 30 minutes, this should be converted to 7.5 hours.

Decimal hours simplify wage calculations, especially when fractions of an hour are involved.

**Also read How to manage time with the Pomodoro Technique

Step 6: Add up the total hours for the pay period
Add up the total hours worked during the entire pay period.

If an employee worked 35 hours in the first week of work, 37.5 hours in the second week, and 40 hours in the third week, the total for the month is 112.5 hours.

The sum of these hours provides a complete view of the total workforce and is crucial for accurate payroll calculations.