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How to Calculate Hours Worked: Methods and Examples

Published on November 19, 20217 min read

Calculating the hours worked by employees is vital to ensuring they receive their accurate pay and maintaining correct payslip and payroll records. It can also help you measure the productivity of your workforce and ensure you comply with time-tracking laws. While determining how many hours employees work can be a complex subject, time-tracking tools can make the process easier.

In this article, you’ll learn how to calculate hours worked from start to finish, and the tools you can use to track your employees’ hours. Here’s what we’ll cover:

How to calculate hours worked: step-by-step instructions
Step 1: Choose a method for recording time
Step 2: Set a start and end time
Step 3: Convert time to 24-hour time
Step 4: Convert minutes to decimals
Step 5: Subtract the start time from the end time
Step 6: Subtract unpaid time for breaks
Step 7: Complete a table of weekly hours
What are hours worked?
Tracking employee time with QuickBooks

How to calculate hours worked: step-by-step instructions

To help you accurately calculate hours and minutes worked, we’ve provided this step-by-step guide. Note that the instructions below may change slightly depending on the needs of your business.

Step 1: Choose a method for recording time

To remain compliant with the Fair Work Act’s recordkeeping requirements, employers must keep a record of the hours worked by employees. However, the Fair Work Act doesn’t require you to track these hours in any particular way as long as the times accurately reflect the time worked.

The method you choose to track hours will ultimately depend on a few factors, such as business size, number of employees and company budget. That said, here are a few tools for tracking employee hours to help you get started:

Mechanical time clock: A mechanical time clock allows employees to place a paper time card into a machine where it’ll automatically stamp the date and time of their shift.
Electronic time clock: An electronic time clock works similarly to a mechanical time clock, except that it’s digitally managed. Employees will scan a badge, input a pin or scan their fingerprint to clock in and out.
Time clock software: With time-tracking software, employees can clock in and out from virtually any device via an online application or website portal. One such software is QuickBooks Time Clock Kiosk, which can help you streamline employee time tracking.
Time-tracking apps: QuickBooks mobile timesheet app provides time-tracking functionality from clock in and clock out to rostering and approving hours on the go.

Semi-automated timesheets: Timesheet calculators can help you automate the calculation of hours worked by simply entering in data such as start time, end time and unpaid breaks. Try our free timesheet calculator.

Step 2: Set a start and end time

When tracking hours worked, it is best practice to set a start and end time for recurring shift work. This will be the time your staff clocks in and out each workday; for instance, an employee may work a shift from 8 AM to 5 PM.

Step 3: Convert time to 24-hour time

To convert 12-hour time to 24-hour time, simply add 12 hours to times ranging between 1 PM and 11:59 PM or use our 24-hour conversion chart below.

Here are a few examples of converting 12-hour time to 24-hour time:

2:35 PM becomes 14:35
5:15 PM becomes 17:15
8:10 PM becomes 20:10
11:40 PM becomes 23:40

12-hour time	24-hour time
1 PM	13:00
2 PM	14:00
3 PM	15:00
4 PM	16:00
5 PM	17:00
6 PM	18:00
7 PM	19:00
8 PM	20:00
9 PM	21:00
10 PM	22:00
11 PM	23:00

Step 4: Convert minutes to decimals

You’ll then have to convert minutes worked to decimals by dividing the minutes by 60 because there are 60 minutes in one hour. Use the below formula to convert minutes to decimals:

Minutes worked ÷ 60

For example, to convert 8 hours and 30 minutes (8:30) to a decimal, you need to divide 30 by 60. In this example, 30 minutes becomes 0.50 (half of one hour).

30 ÷ 60 = 0.50

The total time worked becomes 8.50 hours.

Use the below chart to find common minutes to decimal conversions.

Minutes	Decimal Conversion
15 minutes	0.25
30 minutes	0.50
45 minutes	0.75
60 minutes	1

Converting minutes to decimal values is not the same as having hours rounded. Employees must be paid for all time worked. According to the Fair Work Ombudsman, employees should not have their hours ‘rounded’ if the rounding results in an underpayment.

Step 5: Subtract the start time from the end time

Converting minutes to a decimal value makes it easier to subtract the start time and end time. Let’s say an employee clocked in at 8:30 (8:30 AM), and clocked out at 17:30 (5:30 PM).

When you convert the minutes to decimals using the formula is step 4, you’ll get 8.50 (start time) and 17.50 (end time).

Then, you’ll subtract the start time from the end time to calculate the hours worked. In this example the hours worked are 9:

17.50 – 8.50 = 9

Step 6: Subtract unpaid time for breaks

Make sure to take into account unpaid breaks or time off when you subtract the start time from the end time. This ensures you pay employees for billable hours only. Unpaid breaks are typically any time where employees aren’t actively carrying out job duties, such as rest breaks and meal breaks.

Using the example from the last step, subtract the appropriate lunch break from the total calculated. If the break is 30 minutes, or half an hour, ensure to convert the 30 minutes to the decimal value of 0.5.

In this example, a 1 hour work break is subtracted, meaning this particular employee worked 8 hours.

9 - 1 = 8

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Step 7. Complete a table of weekly hours

Once you calculate how many hours employees have worked in a day, you can create a table to determine their weekly hours. You’ll be able to see how much an employee has worked each week and note if it aligns with company policies. This also makes calculating employee checks much easier.

If you’re looking for an inexpensive way to calculate hours worked per week while avoiding tedious calculations, check out our free timesheet calculator. The timesheet calculator is easy to use, allowing you to input various pieces of data, including clock-in time, clock-out time, unpaid breaks, pay rates and overtime rates. Then, you can download a CSV (comma-separated values) file of the table to retain for your records.

What are hours worked?

According to the Fair Work Act, hours of work is any time during which an employee performs their job requirements. This includes being on duty at the employer’s premises or working remotely. Employers must pay non-exempt employees at least the federal minimum wage for all hours worked, with the exception of rest breaks and/or meal breaks.

Typically, an employee can work a maximum of 38 hours in a week unless an employer asks them to work reasonable extra hours. In some cases, employees may work more than 38 hours in a week based on agreed hours in an enterprise agreement, other registered agreement or employment contract.

How many hours employees work typically depends on whether they are employed on a full-time, part-time or casual basis, or if they are required to stay past the end of their scheduled shift for overtime.

Full-time work

Since the Fair Work Act requires employers to pay employees overtime wages for working more than 38 hours, many people consider this full-time work.

Part-time work

For employees to be considered part-time workers, they will typically have to work less than full-time employees. This can range anywhere from 17 to 34 hours per week. Just like full-time work, this will depend on the employer.

Overtime work

Non-exempt employees who work more than 38 hours in a working week must be paid one and a half times their regular rate of pay. If your employee earns $20.00 per hour and works 39 hours, you’d pay them $30 for that extra hour.

Tracking employee time with QuickBooks

Ensuring employees consistently receive accurate wages is essential. While calculating employee hours may seem like a straightforward process, it can become challenging to make accurate and timely calculations by hand as your workforce grows. Manual work can make the process of calculating employee hours tedious and overwhelming, costing you valuable resources and time.

One of the most efficient ways to track employee hours and count hours worked is by using time-tracking software. QuickBooks Time is a robust time-tracking system that allows office and remote employees and freelancers to clock in and out with just one click.

Get started today with QuickBooks Time and see how it can help you streamline and simplify employee timesheets.

Frequently Asked Questions

How do I calculate my work hours?

What software is used to calculate working hours?

How many hours is considered full-time work?

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How to Calculate Hours Worked: Methods and Examples

How to calculate hours worked: step-by-step instructions

Step 1: Choose a method for recording time

Step 2: Set a start and end time

Step 3: Convert time to 24-hour time

Step 4: Convert minutes to decimals

Step 5: Subtract the start time from the end time

Step 6: Subtract unpaid time for breaks

Grow Your Business with QuickBooks

Step 7. Complete a table of weekly hours

What are hours worked?

Full-time work

Part-time work

Overtime work

Tracking employee time with QuickBooks

Frequently Asked Questions

Related Articles

Looking for something else?

Get QuickBooks

Help Me Choose

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