How to Calculate Hours Worked for Payroll
Turn clock times into payroll hours: minutes to decimals, unpaid breaks, the 7-minute rounding rule and weekly overtime.
- Updated
- By the PaydayMath team · how we work
Whether you are checking your own paycheck or running payroll for a small team, adding up hours by hand is where most errors start: a lunch break counted twice, 7:45 typed as 7.45, an overnight shift that comes out negative. Here is a method that works every time.
Step 1: Use clock times in 24-hour format
Convert p.m. times by adding 12 to the hour: 1:30 p.m. becomes 13:30, 5:15 p.m. becomes 17:15. This removes the a.m./p.m. confusion when a shift crosses noon.
Step 2: Subtract start from end
Subtract hours from hours and minutes from minutes. If the minutes come out negative, borrow one hour (60 minutes).
Example: in at 8:45, out at 17:20. Minutes: 20 − 45 is negative, so borrow an hour: 80 − 45 = 35 minutes, and 16 − 8 = 8 hours. Total: 8 hours 35 minutes.
For overnight shifts, add 24 hours to the end time. In at 22:00, out at 6:30: (6:30 + 24:00) − 22:00 = 8 hours 30 minutes.
Step 3: Subtract unpaid breaks
Under federal rules, a meal break of 30 minutes or more is unpaid only if you are completely relieved from work. Short breaks of about 5 to 20 minutes count as paid time. Some states, such as California, Oregon and Washington, require specific meal and rest breaks. In the example above, a 30-minute lunch leaves 8 hours 5 minutes.
Step 4: Convert minutes to decimal hours
Payroll multiplies your rate by decimal hours, so divide the minutes by 60. 8 hours 5 minutes = 8 + 5 ÷ 60 = 8.08 hours. A very common mistake is writing 8:05 as 8.05; that underpays by about 2 minutes, and 7:45 written as 7.45 underpays by 18 minutes.
| Minutes | Decimal | Minutes | Decimal |
|---|---|---|---|
| 5 | 0.08 | 35 | 0.58 |
| 10 | 0.17 | 40 | 0.67 |
| 15 | 0.25 | 45 | 0.75 |
| 20 | 0.33 | 50 | 0.83 |
| 25 | 0.42 | 55 | 0.92 |
| 30 | 0.50 | 60 | 1.00 |
Step 5: Add up the week and find overtime
Add each day's decimal hours for the workweek. Anything over 40 is overtime at 1.5× your regular rate under federal law. In California, Alaska, Nevada and Colorado, long days can also earn daily overtime. On a biweekly time card, count each week separately; hours cannot be averaged.
| Day | In | Out | Break | Hours |
|---|---|---|---|---|
| Mon | 8:00 | 17:00 | 30 min | 8.50 |
| Tue | 8:00 | 18:15 | 30 min | 9.75 |
| Wed | 8:00 | 17:00 | 30 min | 8.50 |
| Thu | 7:30 | 17:30 | 30 min | 9.50 |
| Fri | 8:00 | 16:30 | 30 min | 8.00 |
| Total | 44.25 (4.25 overtime) | |||
At $18 an hour, that week pays 40 × $18 = $720 plus 4.25 × $27 = $114.75, for $834.75 gross.
Rounding: the 7-minute rule
Federal rules allow employers to round clock times to the nearest 5, 6 or 15 minutes, as long as rounding is neutral over time and does not always favor the employer. With quarter-hour rounding, 1 to 7 minutes are rounded down and 8 to 14 minutes are rounded up: 8:07 becomes 8:00, 8:08 becomes 8:15. Some states and courts restrict rounding, and many employers now pay to the exact minute. If your time clock only ever rounds down, that is not allowed.
What counts as hours worked
- Required training, meetings and work done at home or on your phone.
- Time spent waiting at the workplace when the employer requires it ("engaged to wait").
- Travel between job sites during the day. A normal commute from home to work does not count.
- On-call time, if restrictions are so tight that you cannot use the time for yourself.
The fastest way to do all of this is our free time card calculator: type in and out times for each day, and it subtracts breaks, handles overnight shifts and splits overtime by week. You can print the result for your records.
More guides
- Why Is My Bonus Taxed So High?
- How Overtime Pay Works in the U.S.
- How to Read Your Pay Stub
- Hourly vs. Salary: How to Compare Job Offers
This guide is general information about U.S. payroll rules, not tax or legal advice. Rules change and your situation may differ; check with your employer, your state labor department or a tax professional.