How to calculate payroll hours & minutes

Written by grace ferguson
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How to calculate payroll hours & minutes
Ensure accurate paychecks. (Antiquarian hours image by HamsterV from Fotolia.com)

As an employer, you are responsible for paying your workers on time and correctly. Payroll can be time-consuming, particularly if you have many hourly workers who qualify for overtime. Most employers use a timekeeping method such as a time clock or time sheets to track hourly employees' time. Still, you have to calculate the hours and minutes to accurately pay your employees.

Skill level:
Easy

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Instructions

  1. 1

    Figure the regular hours. Regular hours are paid at the employee's normal rate. For instance, say the employee earns £6.50 per hour and his time for Monday reflects: in at 8:30 a.m.; unpaid lunch at 30 minutes; and out at 5 p.m. Calculate regular hours like this: 8 hours x £6.50 = £52 for that day.

  2. 2

    Calculate overtime. Overtime should be paid at 1 ½ times the employee's regular pay rate and only if the employee has worked at least 40 regular hours for the week. For instance, suppose the employee's regular rate is £8 per hour. His time sheet for Monday to Friday reflects: in at 7 a.m.; unpaid lunch of one hour; and out at 6 p.m. This gives him 10 hours for each day, which equals 50 hours for the week. Pay 40 hours at his regular pay rate and the remaining 10 hours at his overtime rate. Calculate overtime as follows: 10 hours x £12.60 (£8 x 1.5) = £126.

  3. 3

    Calculate double-time hours. It is entirely up to the employer to pay double-time for work performed on holidays and weekends. If he chooses to, it is calculated at twice the employee's normal rate. For instance, say he has eight double-time hours and earns £5 per hour, calculate as follows: 8 x £11 ($9 x 2) = £93.

  4. 4

    Round minutes up and down to the nearest quarter hour. Time clocks (and employees) generally put the exact time worked on the time card. For instance, the time sheet might reflect: in at 8:12 a.m., out at 5:04 p.m. Round as follows: in at 8:15 a.m., out at 5 p.m.

  5. 5

    Convert minutes to decimals. Use the following guide:

    15 minutes is 0.25 30 minutes is 0.50 45 minutes is 0.75 For instance, 6 hours and 30 minutes is 6.50 hours.

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