Do you end up spending countless hours manually calculating worker work hours and pay, solely to finish up with complicated and doubtlessly inaccurate outcomes? You’re not alone. 

Time card conversion could be a difficult course of that eats up helpful time and assets for small companies. On this article, we’ll stroll you thru the steps of time card conversion, find out how to convert timesheets to decimal and supply ideas and methods to make the method extra environment friendly. 

We’ll even introduce you to a while monitoring software program that may automate the method for you. 

What’s time card conversion?

Time card conversion is the method of turning the hours and minutes that an worker has labored right into a format that can be utilized to calculate their pay. 

It’s essential to get this proper since you need to be sure that staff are paid precisely, keep away from time clock fraud and make sure you’re paying your staff in accordance with labor legal guidelines and firm insurance policies.

Time card conversion examples:

If an worker has labored 8 hours and half-hour, you’d convert that to eight.5 hours in decimal type. This decimal type is what you’d use to determine the worker’s pay based mostly on their hourly wage.

Let’s say one other worker labored 7 hours and 45 minutes. To transform this to decimal type, you’d divide the minutes labored by 60, which provides you 0.75. Then, you’d add that decimal to the whole variety of hours labored, which provides you 7.75 hours. 

That is the decimal type that you’d use to calculate their pay based mostly on their hourly wage. And similar to earlier than, it’s essential to be sure that the time card conversion is correct to make sure that your staff are paid pretty and on time.

Some folks do time card conversion manually, however there are additionally instruments like Homebase that may automate the method and make it extra environment friendly. 

How one can convert time to payroll 

Step 1. Calculate the whole time labored

To do that, you may both use the precise work hours that your worker has recorded or use rounded hours as outlined beneath US Federal legislation. When you’re utilizing precise work hours, you’ll want so as to add up the hours and minutes individually and convert any remaining minutes into hours. 

Don’t overlook to account for lunch breaks and additional time. When you’re utilizing rounded hours, you’ll have to around the clock-in and clock-out occasions to the closest quarter-hour.

Utilizing precise hours

If you wish to calculate your staff’ pay based mostly on the precise hours they labored, you’ll want to collect the whole hours and minutes they labored throughout the pay interval. Yow will discover this data on their timesheet or worker time monitoring system.

Let’s say you might have an worker who works 8 hours a day for five days every week and has lunch at their desk, in order that they don’t have to clock out and in for a lunch break. To determine their whole work hours, you’ll want so as to add up the hours and minutes individually.

So, for this worker, they labored 40 hours in whole (8 hours a day x 5 days). However we additionally have to account for the minutes they labored. Let’s say they labored 17, 27, 5, 14, and 10 minutes every day, respectively. That’s a complete of 73 minutes for the week.

To transform these 73 minutes into hours, we have to divide by 60 (since there are 60 minutes in an hour). That leaves us with 1 hour and 13 minutes. If we add that to the 40 hours they labored, we get a complete of 41 hours and 13 minutes for the pay interval.

Word: Whenever you calculate the whole work hours, keep in mind to account for the lunch break and additional time. 

Utilizing rounded hours

As an employer, you may select to spherical your staff’ work hours to make payroll calculations simpler. 

Below US Federal legislation, you’re allowed to spherical hours to the closest quarter. That implies that every quarter consists of quarter-hour, and also you’ll want to regulate your rounding accordingly.

Right here’s an instance: let’s say you might have an worker who clocks in at 9:03 AM and clocks out at 5:25 PM, with out taking a lunch break. In actuality, they labored for 8 hours and 22 minutes that day.

However whenever you spherical their time, you’ll have to around the clock-in time all the way down to 9:00 AM as a result of it’s lower than eight minutes previous the quarter-hour. And also you’ll have to around the clock-out time as much as 5:30 PM as a result of it’s greater than eight full minutes previous the earlier quarter. 

So although the worker truly labored for 8 hours and 22 minutes, you’ll spherical it as much as 8 hours and half-hour.

Bear in mind, it’s essential to spherical your staff’ time accurately to keep away from any authorized points or issues with payroll calculations.

Step 2. Convert commonplace hours to decimal hours

Utilizing decimal hours format is an effective way for employers to handle payroll as a result of it’s a lot easier than utilizing commonplace hours and minutes. When you use the usual format, it’s simple to get confused and find yourself with incorrect wages.

To transform time from commonplace format to decimal format, all you need to do is divide the minutes by 60. Let’s say an worker labored for 37 hours and 43 minutes in a given week. To transform these 43 minutes into decimal format, you’d divide by 60:

43/60 = 0.72

You then would add that decimal worth to the whole variety of hours labored to get the whole decimal time. On this case, the worker labored for 37.72 hours in that week.

That’s all there’s to it! It might appear small, however changing to decimal format can prevent quite a lot of time and trouble in terms of payroll calculations.

Step 3. Multiply decimal time by wage price

When you’ve transformed your staff’ work hours into decimal format, it’s simple to calculate how a lot you should pay them. All you need to do is multiply their decimal hours by their hourly price (wage price).

For instance, let’s say an worker labored 37.72 hours in every week and has an hourly price of $20. To calculate their weekly pay, you’d multiply their decimal hours (37.72) by their hourly price ($20):

37.72 hours x $20 = $754.40

So the worker’s gross pay for that week can be $754.40. However keep in mind, you’ll nonetheless have to account for taxes, insurance coverage premiums, retirement fund contributions, and every other charges or deductions that apply.

There are just a few methods to calculate payout figures, resembling doing it manually, utilizing an on-line work hours calculator, or utilizing payroll and time monitoring software program like Homebase to automate the method. All of it is determined by what works finest for you and your small business.

When you’re on the lookout for a straightforward and environment friendly approach to calculate your staff’ payout figures, contemplate investing in worker time monitoring software program. 

Homebase time monitoring software program is user-friendly and may automate the whole course of, making it fast and straightforward to calculate your staff’ payout figures based mostly on their hourly wage. 

With Homebase, you may even observe worker hours, monitor their schedules, and export time playing cards to payroll with only a few clicks. It’s an important software for any small enterprise with hourly employees trying to streamline their time monitoring and payroll course of.

Save time on payroll.

Auto-convert timesheets into wages, catch errors, pay your staff, and file taxes multi functional place. 

> Simplify payroll