How to Track Employee Hours for Payroll: Tips and Tools

Tracking employee hours is not only about crunching numbers – it is about ensuring fair pay, legal compliance, and efficiency. Accurate time tracking helps prevent payroll headaches and disputes on the pay day. Tracking hours for a dozen employees, a simple Excel spreadsheet is quite enough. But anything above this number requires an efficient automated time-tracking system.

In today’s guide, we discuss the best tools for tracking employee hours. We also show some popular use cases where such systems would be the most helpful. Keep reading to find out more!

Why Tracking Employee Hours Is Important

Tracking employee time is a crucial part of running a successful business. Here are at least four reasons for this:

1. Tracking work hours is necessary for accurate pay.

Nothing frustrates people more than the wrong salary. Without a precise time-tracking system, companies risk underpaying or overpaying workers. The result – disputes, corrections, repeated payments or deductions and, in the end, growing discontent in teams. Accurate payroll fosters trust and ensures employees receive what they expect – regularly and on time.

2. Accurate tracking ensures legal compliance.

Labor laws require keeping timesheets to ensure employees receive fair wages, meeting the minimum pay thresholds. Most jurisdictions set out strict rules about breaks, overtime pay, paid time-off benefits, and record-keeping. Failing to meet these compliance rules results in lawsuits and penalties – and damages business reputation.

3. Time tracking enables efficient resource planning.

Efficiency has become a buzzword, and not without a reason. By tracking employee hours, managers see how much time workers spend on tasks, which helps them assign work better. Tracking overtime work helps prevent burnout and identify staffing gaps. All this allows businesses to make informed decisions about hiring, project timelines, and workload distribution.

4. T&A tracking gives insights into performance and costs.

A clear track-record of work hours offers valuable insights into employee productivity. Business owners can identify bottlenecks and ensure that every dollar spent on labor contributes to business success. Employees also benefit from transparency, knowing what money they have earned and received.

Types of Employees by Work Time Monitoring

How you track time for your workforce depends on the type of contract and worker relations you agreed upon.

Workers are eligible for different types of overtime compensation and benefits depending on their contract. Therefore, companies may need to track their work hours differently. For example, in the US, companies distinguish between:

• Full-time salaried employees (also called FTO and exempt employees). Laws do not require to track hours for payroll, as they receive the same amount of money regardless of the time they worked. Most salaried employees are exempt, which means they are not entitled to overtime pay.
• Non-exempt employees. For such workers, employers must follow the requirements for minimum wages and mandatory overtime pay. Companies must track their hours for payroll accuracy, including overtime and break periods. These are typically non-managerial careers, such as retail workers, food service staff, and skilled trades. 
• Independent contractors, or freelancers. Although not associated with the minimum wage or overtime, contractors often charge at per-hour rates. That’s why time tracking is essential for billing clients accurately and maintaining transparency in project work.
• Shift-based or hourly workers. It often requires tracking time for hourly workers using advanced solutions. These include clock-ins, clock-outs, GPS tracking, and employee scheduling. For workers like cargo drivers, laws may stipulate the maximum time they can work over a shift.

How to Track Employee Hours – 3 Top Tools

As you might have guessed, there’s no one-size-fits-all solution for employee time tracking. Companies need to choose methods that align with their operations, budget, and workforce needs. Here’s a breakdown of the most popular time-tracking methods:

1. Tracking Employee Hours in Excel Spreadsheets

Excel spreadsheets is a go-to tool for startups and small businesses looking for a simple and cost-effective way to track employee hours. The method seems outdated in the age of automation. However, it is pretty good for the start, with minimal workforce management needs.

Pros & Cons of Using Excel Spreadsheets

✅ Cheap and customizable – It is a budget-friendly, straightforward solution without additional software costs. 

✅ No need for additional software – Excel is widely available and easy to use, and you don’t need any third-party applications. 

❌ Prone to human error – Employees should enter their work hours daily to maintain consistency. This potentially leads to mistakes and payroll miscalculations.

❌ Time-consuming – Manual data entry and verification of timesheets may take hours (or even days) for large teams. It may lack the necessary scalability for growing businesses.

If you choose to use Excel for tracking employee hours, share a standard template with your team members. This will ensure consistency and accuracy and will simplify spreadsheet merge by the end of the pay cycle. As an example, you can download this basic Excel template to track personal employee hours.

Make sure your Excel spreadsheet includes columns for employee names, dates, start and end times, breaks, and total hours worked. Use basic formulas and formatting for automation, like:

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While Excel is a simple and cost-effective solution, it lacks automation, which makes it impractical for larger businesses. As companies grow, transitioning to more advanced time-tracking tools becomes essential.

2. Online Timesheet Calculators

For those looking for a free digital alternative to Excel, online timesheet calculators are quite a solution. Online timesheet calculators provide an easy and efficient way to calculate work hours. They are especially handy for freelancers or small teams where each person tracks their timesheets and earnings personally.

For example, the Free Time Card Calculator is an accessible tool offering a structured way to record work hours. It allows setting the start time and end time and deducting break times.

Pros & Cons of Free Timesheet Calculators

✅ Free and easy to use – Online calculators are mostly available at no cost and require no installation. 

✅ Automates calculations – Such tools reduce the risk of errors in manual input. Besides, the input made on the contractor’s side means they already verify the hours worked and final pay.

❌ Lacks payroll integration – Data must still be manually transferred into payroll systems.

❌ No real-time tracking – Workers need to enter their hours manually themselves rather than having an automatic tracking mechanism. So, it creates a bit of a hassle.

Online timesheet calculators are best for companies that don’t require extensive payroll integration. However, entering timesheets manually into the payroll system takes time, which makes this method inefficient for larger businesses.

3. Timesheet and Payroll Software – Juggl

Automated solutions not only track work hours, but also ensure correct timesheet processing and calculation of proper payments. Automated timesheet tracking is ideal for businesses that need a scalable solution. Besides, they must be flexible enough to handle different pay options: various pay rates, different pay schedules, etc.

An example of such automated solutions is Juggl, time-tracking and payroll software. It tracks employee hours and calculates gross payments based on the provided pay rates. It may also track salaries for per-hour workers as well as for contractors submitting their invoices. It allows tracking overtime payments, request paid-time off bonuses, and the like.

Juggl is perfectly suitable for companies with remote, hybrid, or on-site teams requiring seamless time and payroll tracking.

Pros & Cons of Timesheets and Payroll Software

✅ Automates time tracking – Reduces manual errors and improves accuracy in payouts. 

✅ Integrates with payroll systems – Ensures precise and automated pay calculations.

✅ Scalable – Works for businesses of all sizes, from startups to enterprises. 

❌ Requires a subscription – Unlike free tools, such software involves a monthly cost.

How to Use Juggl for Time Tracking

1. Employees submit their timesheet data using Juggl’s desktop platform. They reconfirm their work hours and additionally may describe the task involved.
2. Managers approve timesheets before they sync with payroll.
3. In the self-service portal, employees can access their timesheet and payroll data to see what payments are due or have arrived.
4. Likewise, contractors may submit their hours, based on which the system automatically generates invoices per designated pay rates.

The timesheet and payroll tracking system helps ensure compliance related to compensation and benefits. Automated timesheet tracking and processing to payroll eliminates discrepancies in payouts. The system can send automated email alerts, reminding employees to submit their timesheets early.

All the data about work hours and payments is easily accessible and transparent in the self-service portal, which removes 99% of employee questions about their work pay.

Integrated Time Tracking and Payroll software

In some cases, companies want something bigger than sheer tracking of employee hours. For example, in support centers, managers want to track productivity and occupancy rate to request more staff asap. 

Or, another example, healthcare organizations employ scheduling solutions to track doctors’ work hours and enable flexible booking for visitors.

For such purposes, companies can use integrated suites that seamlessly connect real-time productivity tracking or team collaboration tools with timesheet and payroll tracking software.

For example, one of Juggl’s clients had difficulty tracking employee hours for remote call center contractors. They had implemented a solution for tracking agent performance per each communication channel. The agents could clock in and out. However, the system struggled to process overtime hours – it required manually input the information for each agent into their payroll system.

This process was a waste of time and led to payroll errors that had to be reconciled. That’s where Juggl stepped in. Now, the integrated system processes timesheets and submits to payroll automatically, saving 14 hours of work for the accountant before each pay day.

Another example is integration with QuickBooks accounting software. QuickBooks offer advanced time tracking options which however isn't available for QuickBooks Online Payroll Core. The weekly timesheet functionalities won’t work properly without Premium or Elite subscription. 

Here is where an integrated employee hours tracking solution saves the day. If your business already uses QuickBooks for accounting and payroll and struggles tracking employee timesheets correctly, think of integrating QuickBooks with Juggl.

Pros & Cons of Integrated Employee Hours Tracking Systems:

• ✅ Eliminate manual payroll data entry
• ✅ Offer more detailed analytics on relevant employee data
• ✅ Ensures precise and automated pay calculations
• ✅ Can be cost-efficent
• ❌ Requires setup and configuration

Integrated suites help businesses track tons of worker metrics beyond work hours, crucial for payments, such as overtime hours, time off, holiday work, and others. They help businesses track work hours and productivity metrics in real time. They also provide insights to improve efficiency and optimize work schedules.

As with Juggl, the integration showed great results for the client: it reduced payroll processing costs by 15% and the number of employee inquiries about their salaries by 90%.

The Challenges of Time Tracking – Scenarios

Many companies suffer from fragmented timekeeping and payroll systems, stumbling over errors and inefficiencies. Even when they use large HCM systems, they may struggle with a cumbersome flow of tracking time and paying it correctly. Here are some real-life examples of it:

Scenario 1: Tracking work time for multiple clients

A company does contingent staffing, and every client uses a different timesheet system and preferred payment system. As a result, the company juggles with half a dozen various timesheets and payment systems, manually verifying data.

Scenario 2: Tracking work time with multiple pay rates

Some HCM systems may not work well with multiple cost codes. For example, a law company has difficulties with correct payroll processing when it hires contract employees all over the country who charge their hours to multiple clients every pay period.

Scenario 3: Tracking time with plenty of other data involved

A construction company uses a dedicated timekeeping system where the payroll team needs to manually import the timecards from out in the field. This is because each timecard, besides the weekly hours for each person, contains other data to be handed over to other departments (such as hours on leased equipment, trucking, and materials).

Scenario 4: Tracking time in numerous locations

A payroll system may need to connect to multiple timekeeping systems in various locations. Also, workers may track their time differently, some with timeclocks and others with mobile apps.

Juggling multiple systems for tracking employee hours may turn the financial department’s work into a complete nightmare. Some tools lack flexibility in processing multiple pay rates, others lag behind in tracking PTO and overtime hours.

In a situation as such, you can have all integrated into the same system. It makes tracking work hours and paying correctly so much easier. Contact us to talk about how we can improve your experience. Juggl can help you integrate timesheets, overtime, and PTO tracking into your payroll payments.

How Juggl Helps for Various Use Cases

Powerful timesheets and payroll tracking features make Juggl a game-changer. It offers possibilities to integrate real-time analytics and cross-platform support. This allows companies to improve productivity through automation and focus on more important tasks. It makes Juggl a powerful solution for a wide variety of businesses, such as:

1. IT & development teams: Tracks hours spent on coding, debugging, and meetings to improve resource allocation.

2. Freelancers, independent consultants: Helps track billable hours and manage multiple client projects.

3. Creative agencies: Ensures time is efficiently allocated to different tasks (e.g., design, content creation, client meetings, etc.).

4. Call center teams: Empowers teams with the employee time-tracking desk for coordinating the resolution of support tickets.

5. Healthcare: Helps medical professionals manage appointment schedules and track time dedicated to work patients.

6. Education, online tutors: Monitors time spent on lesson preparation and teaching sessions.

7. Manufacturing & warehousing: Can be used for employee clocking on specific production tasks, ensuring productivity.

Generally, any company managing remote teams, project- or task-based work will benefit from Juggl’s timesheets and payroll features.

A Payroll System That Tracks Time, Saves Time

Time tracking is the backbone of efficient payroll and workforce management. Choosing the best way to track employee hours, think of a system that can save time, reduce errors, and boost productivity for your team.

If any of the pains sound familiar, contact us to learn how Juggl can help. The platform automates the routine, and you focus on what truly matters – core operations and business growth. Hit the Book a Demo and describe your issues!

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