Tracking employee hours and attendance is important for several reasons. Business owners need to know their employees are working safely, wherever they’re supposed to be. Employee absenteeism impacts productivity, morale, and, ultimately, your bottom line. But a comprehensive attendance policy, paired with a time tracking system, increases business performance across the board.
In this article, we’ll go over how to track employee time and cover the following time tracking methods to consider:
Best for businesses that work remotely or on computers
Time tracking software allows employees to track their time and attendance through a web-based application on a computer. Employees can clock in when they start working and clock out when they stop working or easily track their tasks throughout the day.
Employee time data is stored digitally or in the cloud, which is the best solution for employees working from home or on a computer. In addition, running payroll can be as easy as exporting that time data to your preferred accounting software. Many accounting software solutions include a native time and attendance tracking component.
For accuracy and compliance in 2026, ensure the software you choose adheres to differing state rules. For example, requirements for overtime tracking, meal breaks, or rounding rules differ from state to state. States like California mandate tracking of all paid breaks, whereas others may require different standards for rounding clock-in/out times.
Best for businesses with few employees
Many business owners might opt for printed timesheets to track employee time. This time tracking method requires employees to fill out a paper timesheet at the beginning and end of each shift. It’s a common method, but it can result in inaccurate payroll, time theft, and even labor law violations. After all, wage and hour laws require business owners to keep accurate employee time records for at least three years.
For instance, wage and hour laws require businesses in most states to maintain time and attendance records for at least three years. However, some states require specific documentation for up to seven years, like payroll summaries or overtime reports, so ensure compliance based on local laws.
If you choose to track time and attendance using a printable timesheet, ensure workers can use it to track overtime hours, breaks, and time off. These timesheets can help you calculate hours worked and basic pay, but they don’t include taxes, health care costs, or other paycheck deductions.
Best for businesses with one physical location
Business owners with employees at one location or who prefer employees to track time from one device may benefit from a time clock station. The time clock station tracks employee hours with a swipe card or pin. This type of punch clock is prone to buddy punching, where employees clock in for other employees. Meanwhile, workers can lose or damage these time cards easily.
Managers can move time clock kiosks from place to place throughout the day. They can even enable time clocks on several devices, so workers at different job sites can track time easily. For example, a catering company may use time clock kiosks to track employee attendance at various events held in different locations. Or a construction company might use a kiosk at each job site.
Best for businesses with fewer employees or lower budgets
Spreadsheets are a step up from printed paper timesheets. They’re less likely to be lost or damaged but still prone to errors and inaccuracies. Employees must manually enter their work hours, breaks, and overtime using Excel timesheets.
States like Washington require employers to track time-off separately, whereas others may bundle it within general payroll records. Creating separate sections in your spreadsheet for legally required details like time-off tracking and breaks—adjusted based on state policy—can ensure compliance.
If you use spreadsheet timesheets to track employee hours, ensure your employees can access and understand how to use the spreadsheet. Then keep backups of your spreadsheets for at least three years to comply with wage and hour regulations. When it’s time to run payroll, ask employees to verify and sign their timesheets to avoid payroll discrepancies.
Best for businesses with multiple job sites
GPS location tracking paired with geofencing technology makes it easier for employees to track time upon entering and leaving a job site. Time tracking software with geofencing allows managers to set virtual geofences around various job sites. When employees enter and exit the geofence, the software prompts them to clock in and out.
Review rounding rules specific to your state—as some laws prohibit employers from rounding employee hours if doing so results in underpayment. This ensures your GPS tracking software complies with labor laws in 2026.
Best for businesses that work remotely or with multiple job sites
Mobile time tracking apps are a good solution for remote teams and employees who visit multiple worksites throughout the day. Employees can track time from anywhere using the mobile devices they already have in their pockets.
Best of all, mobile time tracking paired with GPS location technology helps curb time theft and buddy punching. Supervisors can see who’s on the clock and where they’re working, ensuring employees are on-site when they’re supposed to be. And when it’s time to run payroll, employees can submit timesheets from an apps, so payroll is always on time and accurate.
Best for businesses that need added security
Time tracking with biometric identifications allows employees to clock in and out using fingerprints or facial recognition. This method of tracking employee hours is especially useful when your building needs added security or to prevent buddy punching.
Although this method is more precise, it can take an initial investment to add to your business and might not be as easy to move around. Biometric identification works best for businesses that only need to track employee entry and exit and at mainly one location.
Best for businesses tracking time for tasks
Tracking work hours with a browser plug-in is similar to time tracking software—and some have a plug-in available already. This method of tracking employees' hours works best for employees who work from home or on a computer.
The main benefit of using a browser plug-in for time tracking is the flexibility to track hours without leaving the application or stopping your work. Which is helpful when tracking how many hours employees work on different tasks.
@quickbooks Did you know you can use #TimeTracking as an employee retention tool? #Productivity #BusinessOwner #SmallBusinessTikTok #SmallBusinessTips #MediumBusiness ♬ original sound - QuickBooks
Choosing a method of tracking employee hours will vary depending on your business’s type, size, and needs. While some time tracking methods might seem intuitive, you first have to understand if they will work for your business.
When deciding how to track employee time, consider your:
You can narrow down your options depending on your answers to these questions. For example, time tracking software and a mobile app might be better if you have multiple locations with a large number of employees. If you want to track their time for each task, a plug-in could also be beneficial.
Once you decide how to track employee hours, add the policy to your employee handbook, communicate it with employees, and motivate them to track their time correctly.
Knowing how to track employee time with the right tools helps you reduce unexcused absences and increase employee morale. After all, when employees consistently come to work, productivity, teamwork, and business performance improves.
Consider time tracking software that integrates with your payroll and accounting software, so you maintain employee records, run payroll faster, and streamline time tracking across the board.
Still have questions about how to track employee time? We’ve got the answers.
Employee time tracking is important because it improves productivity, reduces absenteeism, and sets clear expectations for your employees. It also helps you abide by wages and hours regulations by helping you keep track of employee time.
There are some free time tracking apps available online that will work for smaller teams, as they might have limited features.
The best app for tracking employee hours will depend on your business size, type, and needs. However, time tracking software that allows employees to track their time through a mobile app and offers integration with your payroll and accounting software will be beneficial for most businesses.
The best way to track employee time off is through a time tracking tool that allows employees to plan ahead and schedule time off.
For small businesses, manual timesheets or spreadsheets may work, but time tracking software is ideal for long-term scalability. Look for options that offer free trials and ensure compliance with record-keeping laws.
State laws vary widely, and employers must comply with requirements for overtime calculations, record retention durations, rounding rules, and paid break tracking. Choose systems that offer customizable settings to meet your state-specific regulations.
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