Time Is Money: A Quick Wage-Hour Tip on . Time-Rounding

How to Calculate Payroll Hours Without Rounding

The best modern solution to convert minutes for payroll is using payroll processing software. These payroll processors track hours worked, convert minutes to decimals, and send payments to your workers. If you currently convert minutes by hand, we highly recommend opting for a more robust solution with payroll software. Naturally, it comes with its own set of rules and stipulations to ensure that the company doesn’t abuse the system for its benefit. The more familiar you are with the rules, the lesser the chances of making a mistake that could cost a lawsuit. Calculating payroll and hours worked is simple but can be a hassle. You add up all the time an employee worked that week or month, convert time to decimal format, and multiply it by their hourly rate.

  • If you don’t convert minutes, it can cause a lot of payroll problems down the road.
  • If you’d prefer to not have to handle calculations on your own, you may want to consider a payroll software like Homebase that offers time and attendance tracking.
  • Employers use them to keep track of the time employees spend on certain tasks during a project, and their purpose varies.
  • If an employee worked 8 hours and 3 minutes, or 7 hours and 57 minutes, the bookkeeper would just round the time to an even 8 hours, calculate the employee’s wages swiftly, and everyone would be happy.
  • Is it legal for a company to pay you for 37 hours and they make you work 40 hours.
  • The hundredths place is the second number located behind the decimal point.

Yesterday I called Customer Support and was given a wrong answer when I asked if we input hourly employee time as hours and minutes , the customer service rep said yes, input hours and minutes. Called back today to verify after reviewing information on the Community and was told no. We have to manually convert all employee time every two weeks from minutes to decimals before we input into Quickbooks Payroll. Then I asked if we there were any QB products that do this conversion automatically and no one knew the answer. Although it’s straightforward to convert minutes for payroll, it can be extremely time-consuming if you have a large workforce. You’ll need to run separate calculations for each employee and double-check them to ensure they’re accurate. Nonetheless, your goal is to translate each employee’s hours worked into decimal form.

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This would depend on when your workweek starts and ends. It also depends when your company’s payroll cycle starts and ends. See our blog How to Set Up Pay Periods to Work With Pay Dates for a better understanding how your employer may have their workweek organized. Finally to determined total wage, you will need to convert this to a decimal format. Round the clock in time entry in favor of the employee, and the clock out time entry in favor of the employer.

While having an employee who adds a few minutes to their timesheet each day might not seem like a huge deal, it can have a big impact on your bottom line. For example, if an employee adds five minutes of extra time to their sheet each day, you will pay them for more than 20 hours of unpaid work. According to the American Society of Employers, 20% of all employer revenue is lost to employee time theft. Some employers have turned to time clock rounding to counter this revenue loss, but this practice can present legal issues if it’s not done properly.

Is time rounding necessary?

Most businesses pay their employees biweekly, but another payroll… Max Freedman is a content writer who has written hundreds of articles about small business strategy and operations, with a focus on finance and HR topics. He’s also published articles on payroll, small business funding, and content marketing. First thirty days of subscription to QuickBooks Time, starting How to Calculate Payroll Hours Without Rounding from the date of enrollment is free. Each worker is an additional $[8/10]/month depending on your selection of QuickBooks Time Premium or Elite. If you add or remove services, your service fees will be adjusted accordingly. To be eligible for this offer you must be a new QuickBooks Time customer and sign up for the monthly plan using the “Try it free for 30 days” option.

How do you calculate payroll with decimals?

Convert minutes to decimals

All you need to do is divide your minutes by 60. For example, say your employee worked 20 hours and 15 minutes during the week. Divide your total minutes by 60 to get your decimal. For this pay period, your employee worked 20.25 hours.

If your answer to that question is Because we have always done it, or Because someone told us it is lawful, it might be time to rethink the issue. Should you need additional help in managing your paychecks in Intuit Online Payroll, you can always find me here.

Check whether employees are abusing your rounding system.

Besides making payroll easier for you, a time tracking and payroll solution builds trust and transparency for your team. Calculating logged hours can be a contentious issue, so when the process is automated and clear then employees have no reason to doubt your approach. If an employee has logged 8 hours and 20 minutes, you need to divide 20 minutes by 60. This is the number that you can use in the next step, where you multiply by the wage rate. However, if you calculate this time with the wage rate, you will not get the correct final payroll cost. You have to convert the minutes into decimals, or parts of one hour. This is necessary, as the wage rate is formulated per one hour.

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There may be other cases in which you need to use the overtime rate, such as weekend working hours or other special occasions. You might decide to use rounding in your payroll calculations.

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Based in New York, Kate Bluest has been writing for various online publications since 2005. She has participated in several writing workshops, including the MIT Writing Workshop. Bluest holds https://accounting-services.net/ a Bachelor of Science in business administration from SUNY Empire State College. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you.

  • To convert time into decimal form, all you have to do is divide the minutes by 60.
  • This requires conversion into decimal form since pay rates can’t be calculated off hours and minutes.
  • The employee does not perform any productive work during such attendance.
  • This means that the employee worked 40.25 hours during the pay period.