How to Calculate Total Work Hours Step by Step

In the dynamic landscape of today’s work environment, where time is often considered a precious commodity, understanding and effectively calculating total work hours have become crucial skills for team leaders, managers, business owners, and freelancers.

Accurate timekeeping ensures fair compensation, efficient project management, and overall organizational success. 

In this article, we will provide you with the knowledge and tools to determine the hours worked for different scenarios.

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How to calculate hours worked 

Work hours encompass the designated time during which an individual is expected to be actively engaged in employment-related activities.

These hours typically include both the core period of required presence and any additional time spent on tasks or projects associated with one’s job.

The definition of work hours can vary based on employment contracts, industry standards, and local labor laws.

  • Regular work hours refer to the standard time frame during which an employee is obligated to be present and perform job-related duties;
  • Overtime comes into play when an employee works beyond their regular work hours;
  • Part-time work involves an employment arrangement where an individual works fewer hours than a full-time employee, often less than 35-40 hours per week. 

Understanding these distinctions is crucial for both employers and employees to make sure you are compliant with labor laws, appropriate compensation for overtime, and fair treatment for part-time workers. 

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To calculate hours worked, you can follow these steps: 

Step 1: Determine the start and end time

The foundation of accurate workhour calculation lies in precisely defining the start and end times of your workday or project.

This may involve referring to timesheets, job logs, or even using a work hours tracker to ensure you have a clear record of your working hours.

Step 2: Convert time to military time

To maintain consistency and avoid confusion, it’s advisable to convert both the start and end times to military time (24-hour format). This eliminates any ambiguity arising from AM/PM designations and ensures accurate calculations. So, if you start working at 8 am and finish at 5 pm, you will convert it to 8:00 to 17:00. 

Step 3: Subtract start time from end time

With the start and end times in 24-hour format, you can now subtract the start time from the end time to determine the total work hours.

For example, if you started work at 8:00 AM (08:00 hours) and finished at 5:45 PM (17:45 hours), your total work hours would be 9.75 hours (17.45 – 8.00 = 9.45).

Add up work hours and minutes automatically

“Tracking in Timeular has increased the amount of hours worked that are reported. Before some things were forgotten and missed off. Now the whole day is in Timeular and we have all of the information we need.” – Roman Haag, Partner at iAgentur

Step 4: Subtract unpaid breaks

Unpaid breaks are typically deducted from the total work hours to determine the net work hours. Net work hours represent the actual time spent working, excluding unpaid breaks.

This step is crucial for ensuring that employees are compensated fairly for their actual work hours.

To subtract unpaid breaks, simply identify the total length of the break and subtract it from the total work hours. For example, if you worked for 8 hours and took a 1-hour lunch break, your net work hours would be 7 hours (8 – 1 = 7).

Step 5: Convert to decimal format

Since work schedules often involve minute-level precision, it’s essential to convert the minutes into decimal hours to obtain a more accurate representation of the total working time. To do this, simply divide the minutes by 60.

For instance, if you worked for 4 hours and 15 minutes, the decimal equivalent would be 4.25 hours.

Step 6: Add up hours worked for the pay period

How to add up hours worked? This step typically involves reviewing timesheets, payroll records, or time-tracking system data to compile the total hours worked for each employee within the specified pay period.

The accumulated hours for each employee are then used to calculate their gross pay, which is the total amount of money earned before deductions for taxes, benefits, or other payroll items.

Tracking hours worked as an employer or freelancer 

As mentioned before, tracking hours worked is essential to calculate total work hours and to ensure fair and accurate compensation for maintaining financial transparency and productivity. 

Benefits of time tracking for employers and freelancers

Accurate compensation

Tracking worked hours ensures that employees are fairly compensated for their time. By accurately recording hours worked, including overtime and breaks, employers can avoid underpaying or overpaying employees. This promotes a sense of trust and fairness among employees, fostering a positive work environment.

Improved project management

Tracking worked hours provides valuable insights into project progress and identifies areas for improvement. By analyzing employee time allocation across projects, managers can gain a clearer understanding of where time is being spent effectively and where there’s room for optimization. This data can be used to streamline processes, reallocate resources, and meet deadlines more efficiently.

Compliance with labor laws

Adherence to labor laws and regulations is essential for both employers and employees. Accurately tracking worked hours ensures compliance with overtime rules, break requirements, and pay standards. This protects employees from exploitation and ensures that they receive the compensation they rightfully deserve.

Enhanced performance evaluations

Time-tracking data can be used to conduct more meaningful performance evaluations. By measuring and analyzing employee productivity across different tasks and projects, managers can identify areas for skill development and training. This data-driven approach to performance management helps employees improve their skills and contribute more effectively to the organization’s success.

Cost-effective billing for freelancers

Freelancers rely on accurate time tracking to ensure fair billing for their services. By tracking time spent on each project and task, freelancers can improve client billing and avoid disputes over compensation. This contributes to a stronger relationship with clients and fosters repeat business.

Hour tracking options

Various options are available for hour tracking, ranging from manual methods to sophisticated software solutions. Here are a few methods to help you track your hours to calculate work hours:

Time tracking apps

A time-tracking app can be extremely helpful when tracking work hours. They can automate the process of tracking time spent on different tasks, projects, and clients. They can also generate reports and invoices.

Benefits:

Some of the most popular and efficient time-tracking apps include Timeular, a powerful and easy-to-use time-tracking software that allows you to accurately track time spent on tasks without disrupting your workflow. 

With an intuitive interface, a wide range of features, and multiple integrations, Timeular makes it very simple to stay on top of your time.

With Timeular, you no longer have to rely on manual time-tracking methods or juggle between multiple tools to manage your time effectively and accurately.

Track work time with zero effort or frustration

Automatically or manually. With a physical time tracker or keyboard shortcuts. Under 1 minute a day.

Handwritten timecards

Handwritten timecards are a simple and inexpensive way to track hours. They are also often used in industries where employees work remotely or without internet access.

Benefits:

  • No need for training
  • Inexpensive to implement
  • No additional software required
  • Suitable for remote or mobile employees

Drawbacks:

  • Time-consuming to record and maintain
  • Susceptible to errors and omissions
  • Difficult to generate reports
  • Not scalable for large teams or complex projects

Overall, handwritten timecards are a viable option for businesses with small teams or simple payroll needs. However, they are not the most efficient or accurate method of tracking hours. Businesses with larger teams or more complex payroll needs should consider using an online time clock app.

Time clocks

Time clocks are physical devices that employees use to clock in and out of work. They are a more reliable and accurate way to track hours than handwritten timesheets, and they can also be used to track breaks and overtime hours.

Benefits:

  • More reliable and accurate than handwritten timesheets
  • Tracking breaks and overtime hours
  • Integration with payroll systems
  • They can be used with a variety of scheduling systems

Drawbacks:

  • They can be expensive to purchase and install
  • They require additional maintenance
  • Not as portable as time-tracking apps
  • Not suitable for remote or mobile employees

Time clocks are a good option for businesses that need a reliable and accurate way to track hours and could be especially well-suited for businesses with a large number of employees or complex payroll needs. However, businesses with remote or mobile employees should consider using a time-tracking app option.

TIP: Looking for a digital version of this method? Get to know the employee time clock app you need!

Spreadsheets

Spreadsheets are versatile tools that can be used to track hours. They are a good option for businesses that need a flexible and customizable way to track hours.

Benefits:

  • Flexible and customizable
  • They can be used to track multiple projects and tasks
  • It’s possible to generate reports and invoices
  • They can be shared with multiple users
  • They can be used on desktop, mobile, and web

Drawbacks:

  • They can be time-consuming to set up and maintain
  • Prone to errors
  • Not user-friendly, messy, and clunky
  • Not as secure as dedicated time tracking systems

Spreadsheets are a viable option for businesses with small teams or simple payroll needs. However, they are not the most efficient or accurate method of tracking hours. Businesses with larger teams or more complex payroll needs should consider using a solution such as a time-tracking app.

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Online time clocks

Online time clocks allow employees to clock in and out using computers or mobile devices. This method is more accurate and efficient than manual timesheets but it requires additional software and infrastructure.

Benefits:

  • More accurate and efficient than manual timesheets
  • Can track breaks and overtime hours
  • Integrates with payroll systems

Drawbacks:

  • Requires additional software and infrastructure
  • They may not be suitable for all businesses
  • They can be expensive to implement

Integrated payroll systems

Integrated payroll systems combine time tracking with payroll processing. This eliminates the need to manually enter time into payroll software.

Benefits:

  • Eliminates the need to manually enter time into payroll software
  • Improves accuracy and efficiency

Drawbacks:

  • Requires a more expensive payroll system
  • They may not be suitable for all businesses

Conclusion

After all the information shared in this article, you know how to calculate the total work hours and you have a better understanding of the importance of accurately tracking worked hours and its crucial role in managing employee schedules, ensuring compliance with labor laws, and optimizing payroll processes. 

Apply the methods discussed in this guide to tailor your time management strategy to your unique circumstances. Whether you’re an employee striving for efficiency, a freelancer juggling multiple projects, or an entrepreneur charting your course, the ability to calculate work hours is a foundational step toward a more balanced and successful professional life.

Remember that as important as understanding the methods is also choosing the best tools to help you accurately track worked hours. When it comes to tracking and calculating hours, there is no unique solution; instead, there is one that can suit your needs perfectly and allow you to improve your daily work. So, narrow down your options to find what best matches your requirements. 

Read also: Why time management is important in a business

FAQ

How to calculate business hours between two dates?

Calculating business hours between two dates involves considering the business hours of the organization and accounting for weekends and holidays. After that, you just need to follow the steps to calculate the hours worked.

For example, assume your company’s standard business hours are 9:00 am to 5:00 pm, Monday through Friday, with an unpaid lunch break of 1 hour. You want to calculate the total business hours between November 20, 2023, and November 21, 2023.

  • Start by identifying the start and end dates:

Start date: 2023-11-20

End date: 2023-11-21

  • Then, convert the dates to military time:

Start date: 2023-11-20 00:00:00

End date: 2023-11-21 23:59:59

  • After that, calculate the total business days:

Number of days between November 20, 2023, and November 21, 2023: 2

Number of weekends: 1

Adjusted business days: 2 – 1 = 1

  • Exclude holidays:

No holidays occur within the specified dates.

  • Calculate business hours:

Standard business hours per day: 8 hours

Total business hours: 1 * 8 = 8 hours

  • Include unpaid breaks:

Net business hours (excluding unpaid breaks): 8 – 1 = 7 hours

  • Account for flexible work arrangements:

Assume no flexible work arrangements apply.

  • Validate the results:

The calculated business hours of 7 hours align with the organization’s business hours and reflect no adjustments for holidays or unpaid breaks.

For complex scenarios involving multiple business locations, calendars, and exceptions, consider using a time-tracking app specifically designed for calculating business hours between dates.

What about tracking overtime?

Overtime tracking is crucial for staying compliant with labor regulations, ensuring accurate payroll records, and enhancing overall productivity. To track overtime effectively, companies should define overtime rules, implement an employee overtime tracker, identify overtime occurrences, calculate overtime compensation, and reconcile payroll records. 

Overtime pay usually exceeds regular pay.

For example, in the United States, overtime pay is typically calculated at 1.5 times an employee’s regular hourly rate for hours worked beyond 40 in a workweek.

Remember that the specific rules for overtime pay can vary based on employment agreements, employee classification, and jurisdiction. Certain states may have distinct overtime thresholds or rates, and some industries may have unique regulations. 

Overtime tracking can be done using manual timesheets, online time clocks, time-tracking apps, or integrated payroll systems.

Read also: How to calculate employee overtime

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