Do you spend endless hours manually calculating employee hours and salaries, resulting in confusing and potentially inaccurate results? You are not alone.
Timecard conversion can be a difficult process that consumes valuable time and resources for small businesses. This article describes the steps and methods for converting timecards. time sheet Provides tips and tricks for converting to decimal and making the process more efficient.
We also introduce time tracking software that can automate the process.
What is timecard conversion?
Timecard conversion is the process of converting the hours and minutes worked by an employee into a format that can be used to calculate payroll.
Getting this right is important because you want to ensure that your employees are paid accurately. time recorder scam And make sure you’re paying your team in accordance with labor laws and company policies.
Examples of timecard conversions:
If an employee worked 8 hours and 30 minutes, convert that to 8.5 hours in decimal format. This decimal format is used to calculate an employee’s salary based on their hourly rate.
Suppose another employee works 7 hours and 45 minutes. To convert this to decimal format, divide the work hours by 60, which is 0.75. Then add that decimal to the total number of hours worked and you get 7.75 hours.
This is the decimal format used to calculate salaries based on hourly rates. Also, as before, it is important to ensure that time card conversions are accurate to ensure that employees are paid fairly and on time.
Some people do the timecard conversion manually, but there are tools like Homebase that can automate the process and streamline it.
time graph to decimal point
How hours are converted to payroll
Step 1. Calculate total work time
To do this, you can use the actual hours worked as recorded by your employees or you can use rounded hours as defined by US federal law. If you’re using actual hours worked, you’ll need to add up the hours and minutes separately and convert the remaining minutes to hours.
Don’t forget to consider lunch breaks and overtime. If you are using rounded hours, the clock in and clock out times should be rounded to the nearest 40 minute unit.
use real time
If you want to calculate the salary based on the actual working hours of the employee, you need to collect the total hours and minutes worked by the employee during the pay period.This information is available on timesheets or employee time tracking system.
For example, let’s say you have an employee who works 8 hours a day, 5 days a week, and eats lunch at his desk. So you don’t have to go in and out during your lunch break. To get the total working hours, you need to add up the hours and minutes separately.
In other words, this employee has worked a total of 40 hours (8 hours per day x 5 days). But the hours they worked should also be considered. Suppose they worked 17, 27, 5, 14 and 10 minutes each day. Total for the week is 73 minutes.
To convert this 73 minutes to hours, you need to divide by 60 (because there are 60 minutes in an hour). We have 1 hour and 13 minutes left. Add this to their 40 hours of work, and you get a total of 41 hours and 13 minutes of pay periods.
Note: Remember to take lunch breaks and overtime into account when calculating total hours worked.
use rounded times
Employers may choose to round an employee’s working hours for easier payroll.
U.S. federal law allows hours to be rounded to the nearest whole number. This means that each quarter consists of his 15 minutes and the rounding should be adjusted accordingly.
For example. Let’s say you have an employee who starts work at 9:03 am and leaves at 5:25 pm without taking a lunch break. In fact, they worked 8 hours and 22 minutes that day.
However, if you want to round the employee’s hours, then 15:00 is less than 8 minutes, so the clock-in time should be rounded to 9:00 AM. Also, the clock-out time needs to be rounded to 5:30 PM because it’s been over 8 full minutes since the last quarter.
Therefore, even though the employee actually worked 8 hours and 22 minutes, it is rounded up to 8 hours and 30 minutes.
Remember that it is important to round employee hours correctly to avoid legal issues and payroll complications.
Step 2. Convert Standard Time to Decimal Time
Using the decimal time format is much easier than using standard hours and minutes, so it’s a great way for employers to manage payroll. Using a standard format can lead to confusion and incorrect wages.
To convert hours from standard format to decimal format, simply divide the minutes by 60. Suppose an employee worked 37 hours and 43 minutes in a particular week. To convert this 43 minutes to decimal form he divides by 60.
43/60 = 0.72
Then add that fractional value to the total number of hours worked to get the total fractional hours. In this case, the employee said that during the week he worked 37.72 hours.
That’s all! It may seem small, but converting to decimal format can save you a lot of time and effort. payroll calculation.
Step 3. Multiply the fractional hours by the wage rate
Converting an employee’s hours worked to decimal format makes it easier to calculate how much an employee should be paid. All you have to do is multiply their fractional hours by the hourly wage (wage rate).
For example, an employee works 37.72 hours a week and earns $20 an hour. To calculate their weekly wage, multiply the number of decimal hours (37.72) by the hourly wage ($20).
37.72 hours x $20 = $754.40
Therefore, the employee’s gross salary for the week is $754.40. However, please note that you must consider taxes, insurance premiums, retirement contributions, and other applicable fees and deductions.
To calculate the payment amount, you can use the manual calculation method or Online working hours calculatoror use payroll and time tracking software such as: home base Automate the process. It all depends on what works best for you and your business.
If you’re looking for an easy and efficient way to calculate employee pay, consider investing in employee time tracking software.
The home-based time tracking software is easy to use and automates the entire process, making it quick and easy to calculate pay based on your employees’ hourly wages.
Homebase also allows you to track employee hours and monitor your employees. scheduleexport the timecards to payroll in just a few clicks. This is a great tool for small businesses with hourly workers looking to streamline their time tracking and payroll processes.
Save time on payroll.
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