How to Calculate Work Hours: A Step-by-Step Guide

You’re piecing together timecards between meetings, trying to make sense of who worked what and when. Travel time, split shifts, missed time punches—it all adds up, especially if you don’t know how to calculate work hours correctly. Before you know it, you're spending more time triple-checking hours than focusing on your team or your customers. 

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Let’s change that.

TL/DR: How to calculate employee work hours

Too many shifts, not enough time? Here’s the lowdown on how to calculate time worked.

• What counts as work hours: Time spent working, on-call, in training, or traveling between job sites. Breaks and off-duty time don’t count.
• How to calculate work hours: Track employee clock-in and clock-out times, subtract breaks, and convert minutes to decimals for payroll.
• Types of hours to track: Full-time, part-time, and overtime. In most states, overtime kicks in after 44 hours a week.
• What gets messy: Missed punches, unpaid breaks, rounding errors, and keeping up with overtime rules.
• How to track it all: Paper sheets, punch clocks—whatever gets the job done. Prefer a more hands-off approach? Time tracking software like Homebase keeps timesheets accurate, organized, and off your plate.

What is the definition of “work hours” vs. “non-work hours”?

It seems easy enough: work hours are when your team’s on the clock, doing their job. And non-work hours are when they’re not. Right? Well, not exactly.

Work hours don’t always mean someone’s hammering, typing, or pouring drinks. They also include those in-between moments—like waiting on-site or being on-call—when an employee’s expected to be available, even if they’re not actively working.

Non-work hours are a bit more straightforward. Think scheduled breaks, unpaid lunches, or any time your team is free to step away to do what they want.

Need a few real-life examples? Let’s break it down.

1. On-call employees

Let’s say you manage a restaurant and expect a game-day rush. You schedule a few staff members to be on-call, just in case.

• If they show up and start doing tasks, like roll-ups or polishing silverware those are work hours.
• If you ask them to stay in a specific spot, ready to jump in, that’s also working time.
• But if they’re free to chill at home or do what they want while on call, they’re technically off the clock until you officially call them in.

2. Movement between locations

Now, let’s say you run a construction business or multiple coffee shops.

• If someone’s heading to their first job site for the day, that’s considered their work commute so those hours don’t count.
• But if they’ve already clocked in and you send them across town to another location mid-shift, that travel time is paid. You’ll need to calculate those hours worked.

3. Skills training times

Whether your team’s learning a new POS system, brushing up on food safety, or getting certified on the latest lash techniques—training time can count as paid work. But not always. Here’s how to tell the difference:

• If you require the training, the time counts. Period. That includes in-house sessions, compliance refreshers, and any other job-specific training—even those completed at home.
• But if someone signs up for a workshop on their own like a stylist taking a weekend color class, that’s voluntary. So, you’re off the hook for those hours.

How to calculate work hours

Still relying on timesheets or that trusty punch clock by the door? Manual time tracking might feel old-school, but it’s still how plenty of businesses calculate hours worked. If that’s you, here’s how to get it right,

Step 1: Start and end time

Whether you're using paper timesheets, a punch clock, or employee time tracking software, you’ll need the clock-in and clock-out times for each shift. 

Let’s say your employee clocked in at 10:00 a.m. and clocked out at 5:00 p.m. on Monday. Hold onto that, we’ll calculate their total hours worked as we go.

Step 2: Convert to 24-hour time

Now, switch those times into a 24-hour format. Trust us, it makes the math easier and cleaner. Just add 12 to any time after noon. So, 1:00 p.m. becomes 13:00, 5:00 p.m. becomes 17:00, and so on.

For our example, 10:00 a.m. stays 10:00 and 5:00 p.m. becomes 17:00.

Step 3: Do the math

Next, subtract the start time from the end time. In our example: 17:00 minus 10:00 equals 7 hours. But that doesn’t mean your employee worked all 7. You’ll need to subtract any unpaid breaks or non-work time to get the actual total. That’s up next.

Step 4: Subtract unpaid breaks

Now, we need to subtract any unpaid breaks from time spent at work to get total work hours. So, if your employee had a 30-minute unpaid break, we’re going to take that out of the hours. 

7:00 hours at work - 00:30 unpaid break = 6:30 work hours

Step 5 - Change to decimal format

To make payroll easier, convert minutes into decimals. The hours stay the same, just divide the minutes by 60. In our example: 30 ÷ 60 = 0.5. 

So, the total amount your employee worked on Sunday is: 6.5 hours.

Sounds pretty simple, right? And it is. Until your team grows, shifts overlap, and manual tracking turns into a full-time job. Good news? There’s a better way. More on that later.

Types of work hours

It might be surprising, but not all work hours are created equal. Here’s how to tell the difference between part-time, full-time, and overtime.

1. Part-time hours‍

Part-time hours are typically anything below the full-time threshold you set. In restaurants, retail, or cafés that usually means less than 30 hours a week, but it’s up to you to define it in your team’s contracts or onboarding.

One thing to watch: If your part-time team regularly creeps into full-time territory, they may start expecting full-time perks like benefits or PTO. A reliable work hours tracker can help you spot that before it becomes a problem.

2. Full-time hours

Full-time hours are the gold standard. It’s great for your team (hello, consistent paycheque) and even better for your business when you’re trying to plan staffing and calculate job hours without a spreadsheet-induced meltdown. 

So what’s considered full-time? According to the Affordable Care Act, full-time means working at least 30 hours a week or 130 hours a month. Full-time hours aren’t just about steady pay—they come with benefits like paid time off, health insurance (required for businesses with 50+ employees), and retirement plans.

Pro tip: Make sure part-time and full-time hours are clearly defined in your onboarding docs, so everyone knows where they stand and what benefits they’re entitled to.

3. Overtime

Overtime: The hero and headache of managing hourly teams. Any time your employee crosses the 44-hour mark in a week, those extra hours are officially overtime. And according to the Fair Labor Standards Act (FLSA), that means you need to pay time and a half for every minute beyond those 44 hours.

Let’s break it down with a real-world example: Say your bartender picks up two extra shifts because someone called in sick (again). That bumps their total hours to 50 for the week.

• Regular pay: $15/hour
• Overtime rate: $15 × 1.5 = $22.50/hour
• Regular hours: 44 × $15 = $660
• Overtime hours: 6 × $22.50 = $135
• Total weekly pay: $795

This is where an overtime hours calculator or automated time tracking tool comes in handy. It does the math, flags overtime, and saves you from chasing down punch cards at the end of the week.

Struggles businesses face when calculating work hours

If you’ve ever been elbow-deep in spreadsheets, second-guessing punch times, or Googling how to calculate total hours worked at 11 p.m., you know this isn’t as simple as it seems. But the success of your business relies on calculating those work hours right. Mess it up, and it can affect pay, morale, and even your legal standing.

Here are some of the most common issues businesses face when tracking work hours:

• Inconsistent clock-ins and clock-outs: Whether you're using paper timesheets or a basic system, it only takes one missed punch or forgotten login to throw off your totals. Accuracy starts at the clock.
• Overtime that flies under the radar: When shifts run long or staff pick up extra hours, it’s easy to miss when they cross into overtime territory. That’s when pay rates change and your payroll needs to catch up.
• Unclear break tracking: Do your employees clock out for break times? Are they entitled to paid breaks? How long should they be? If those rules aren’t clearly tracked, your work hours calculations can quietly drift off course.
• Messy travel times: For mobile teams or employees hopping between locations, knowing what counts as “on the clock” isn’t always obvious. But getting it right matters for compliance and trust.

4 simple ways to calculate and track work hours

Every business starts with a simple system. But as your team grows, manually calculating work hours and payroll for every shift quickly becomes a hassle. The good news? There are better ways to track employee working hours—some basic, some more advanced. Let’s walk through your options and find what works best for you.

1. Paper timesheets

The OG of tracking time. Your team fills in their hours on a paper timesheet, or if you’re feeling slightly more modern, a Google Sheet. They note when they clocked in, took breaks, clocked out, and whether any of it qualifies as overtime.

While this method sounds simple, missed entries, messy math, and inconsistent formats can lead to serious errors. And without proper oversight, accidental (or intentional) time theft can quietly chip away at your bottom line.

2. Mechanical time clocks

This old-school method is commonly used in factories or warehouses, where employees punch a physical time card into a mechanical clock. It logs their start and end times, and then you enter the info into your payroll system.

The downside? It’s easy for buddy punching to happen, time cards to go missing, and records to pile up fast. Plus, you’ll need to keep those time cards on file for years in case the FLSA (Fair Labour Standards Act) comes knocking—so you’ll need to invest in some serious filing space. 

3. Electronic time clocks

Think of electronic time clocks as the digital remix of the old punch clock. Instead of paper cards that can get lost or smudged, employees clock in using a PIN or fingerprint. No more buddy punching or overflowing filing cabinets.

All punches are stored digitally, so when it’s time to calculate payroll hours or respond to an FLSA audit, you’ve got everything in one place. It’s a solid upgrade but can be limiting if you’re managing multiple locations or remote teams since the system relies on physical hardware at each site.

4. Time tracking software

This is where things really level up. Time tracking software like Homebase takes the best parts of digital tracking and adds flexibility, automation, and control. Employees can clock in from their computer or mobile device, and the system handles the calculations automatically. No math, no manual entry, and no missed punches.

Managing multiple locations? With GPS-enabled features, employees can only clock in if they’re within range of the job site. Some tools even send text reminders when they arrive, prompting them to clock in so nothing slips through the cracks.

It’s an easy and accurate way to track employee hours whether your team is onsite, remote, or always on the go. And when you factor in the cost of errors, time theft, or compliance issues, it’s often the most cost-effective option as well.

Make calculating work hours a breeze with Homebase.

You start the week with a plan and end it buried in timesheets. Someone forgot to clock out, another swears they worked eight hours (but the math says six), and now you're manually fixing it all before payroll. With Homebase, calculating work hours doesn’t have to be a hassle.

Here’s what you get with Homebase time tracking:

• Easy clock-ins from phones, tablets, or your POS. No special hardware required.
• Built-in GPS tracking so your team can’t clock in while waiting for their morning cold brew.
• No more buddy punching, PINs and personal logins keep it all legit.
• Automated timesheets calculate total hours worked (including breaks and OT) so you don’t have to.
• Payroll-ready data syncs with your system so payday is a breeze, not a burden.
• Smart alerts remind employees to clock in, out, or take a break.
• Multi-location support lets you manage everything from one place even when your team is spread out.
• Labor law compliance tools automatically update with local, state, and federal regulations.
  
  

And it’s not just about time tracking and payroll. Homebase also helps with team messaging, shift scheduling, hiring, and more. So you can keep your people organized, your labor costs under control, and your week a whole lot smoother.

Try Homebase for free today—and make those work hours work for you.