Knowing how to calculate hours worked helps track productivity, ensures you receive the correct amount of wage, and leads to positive working relationships. For production companies, it is a legal requirement.
This guide will explain six steps to calculate working hours. In addition, we’ll discuss ways to track overtime hours.
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How to Calculate Hours Worked In 6 Steps
Follow these instructions to calculate work hours, along with examples:
1. Set the Start and End Times
Whether you use a physical timesheet or software, recording what time you start and end work each day is important. For example, you start work at 8am and finish at 6:15pm.
2. Convert Work Hours to Military Time
One of the most common aspects that may confuse people when calculating worked hours is the am and pm distinction. Therefore, we recommend using military time or the 24-hour clock to ease the subtraction process.
With military time, morning hours before 1pm stay as is, but from 1pm onward, add 12. So 8am remains 08:00, while 6pm becomes 18:00. You don’t need to use am and pm since morning and afternoon or night times will differ.
3. Subtract the Start Time From the End Time
To get the total hours worked, subtract the time you clocked in from when you finished for the day. For example, if you started work at 08:00 or 8am and ended at 18:15 or 6:15pm, the calculation would be:
18:15 - 08:00 = 10.15
In total, the work day was ten hours and 15 minutes.
4. Subtract Unpaid Breaks
If you are paid hourly, subtract the break time from your total working hours. For example, if you took a one-hour lunch break, the calculation would be:
10.15 - 1 = 9.15
This means you worked nine hours and 15 minutes that day.
Some production companies or freelance positions may require a more detailed timesheet. Aside from documenting the total break hours, you or your employer may need to note the exact time of the breaks.
Usually, unpaid breaks are shown as clocking in and out twice throughout the day, which you must add to the timetable records. For example, an employee takes unpaid time from 1pm to 2pm.
5. Convert the Minutes to Decimals
Once you’ve calculated the total worked hours, it’s time to convert the amount to a decimal value. This ensures accurate multiplication with the hourly rate. It also helps you calculate employee hours worked per day.
To convert time to decimal hours, divide the minutes by 60. For example:
15 / 60 = 0.25 or 9.25 hours
The above result shows that you worked 9.25 hours.
6. Add Total Hours for Pay Period
To calculate the gross wage, add all the daily work hours and multiply the total amount by the hourly rate. Finally, multiply by your pay cycle, whether weekly, biweekly, or monthly.
For example, you work 9.25 hours with a $10/hour rate that you receive weekly. So the calculation would be:
9.25 x $10 = $92.5
$92.5 x 7 = $647.5
From these calculations, you’ll receive $92.5/day or $647.5/week.
How to Track Working Hours
Aside from calculating the number of hours worked, you need to track the start, end, break clock-in, clock-out, and overtime.
Work Hour Tracking Options
Here are six methods for tracking hours worked:
Handwritten Time Cards
This pen-and-paper method is still acceptable for many people and companies. You can write down all the hours worked on a document and send it to the employer weekly or biweekly.
However, this method is prone to time theft as it’s difficult to ensure the accuracy of the reported working hours and minutes. Furthermore, it can reduce productivity since you or another team member must check these documents manually and calculate the employee hours worked.
Mechanical Time Clocks
A mechanical time clock is a device that stamps time and date onto a paper time card. To use it, insert the paper into the machine when you arrive and leave work.
Electronic Time Clock
This method works similarly to the previous device, except it’s paperless. To use it, tap the employee card on the machine’s sensor, and it stamps a digital time card to record the date, start, and end time. Some electronic clocks require a PIN or fingerprint to record data.
Time Tracking Software
Utilizing time clock software on computers or mobile devices is a modern way to calculate employee hours worked. Once you log in to the system and click the button to clock in and out, the website server will record the data.
Most software comes with a location option to ensure the start and end work times are recorded. They usually gather and calculate the employee hours worked per pay period. Some popular time clock software includes Nifty and Workday.
Microsoft Excel or Google Sheets are great options for calculating employee hours worked, especially for individuals or small teams. You can create a timesheet template with different formulas and personalize it to your needs.
A freelancer may charge different rates for different projects. Hence, calculating hours worked and wages paid can be complicated – not to mention the salary guidelines and overtime laws to follow.
Therefore, many businesses prefer using payroll solutions to count employee working hours and paychecks. These services usually include calculating time spent for work, gross wages, overtime compensation, and tax deduction.
Overtime is the work duration that exceeds the normal hours. Its laws vary depending on the country.
The US Fair Labor Standards Act (FLSA) states that the overtime rate is one and a half times the regular 40 hours/week. The federal regulation allows companies to give more than the arranged amount. Here’s the formula:
Hourly pay rate x overtime rate = overtime pay
For example, if the hourly wage is $12, multiply it by 1.5 to get the overtime rate. The calculation would be:
$12 x 1.5 = $18
If you earn $12/hour and work 45 hours/week, the overtime would be five hours. To calculate the wage, use the standard rate for the first 40 hours, then add the overtime pay.
($12 x 40) + ($18 x 5) = $480 + $90 = $570
Based on the result, you’ll receive $570/week.
According to the FLSA, companies must also pay overtime to part-timers that exceed 40 hours/week.
Calculating the number of hours worked is important to ensure you earn the proper payment. It’s also a good way to track productivity and foster a positive working environment.
There are several crucial steps to calculate worked hours and minutes. First, determine the start and end times, then subtract the clock-in from clock-out time and unpaid breaks, and finally, add the total number of hours for the pay period. The most convenient way to track working hours is by using time-tracking software.
We hope this article has helped you calculate the number of hours worked. If you have any questions, let us know in the comments.