Setting up an effective method to calculate work hours starts with choosing the way your business will track time.Īt the most basic, there are three ways to do so: 1) Choose The Way Your Business Will Track Time After that, it’s just a matter of using those numbers to do a bit of simple math to figure out each employee’s paycheck. For this job, she is paid $10 per hour (this becomes important in step four).Īrmed with employee and pay-rate information, it then becomes a matter of setting policies and procedures that govern the way you handle the numbers involved. Sometimes, though, Katie fills in as a server when someone calls in sick. Katie works at a restaurant where her primary responsibility is acting as hostess, for which she is paid $15 per hour. We can help with the first part.įor the purposes of this exercise, we’ve created a hypothetical employee named Katie.
Work time calculator how to#
The best way to learn how to calculate work hours is to watch it being done and then go do it yourself. That’s why it’s important to keep accurate records and retain those records for at least two years. The IRS can also ask you to produce records of time worked going back as far as two years to ensure that you were and are compliant with local, state, and federal labor laws. That means they can be used in legal proceedings as evidence. The important thing to keep in mind about all this is that time cards (in whatever format you adopt) are legal documents. Work hours, then, are the same for businesses of all sizes and types, no matter where they’re located. time an employee must be on duty, on the employer premises, or at any other prescribed place of work.Īnd because the USDOL is the one doing the defining, it applies to every business that sets up shop in the United States. The United States Department Of Labor (USDOL) defines work hours as:
The federal government actually sets the standard. In the case of your employees’ time at work, it’s not an arbitrary definition that differs from one business to the next. Before you sit down to calculate work hours, it’s crucial to understand exactly what numbers you’re crunching and how important those numbers (and the records on which they appear) are to your business.
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