Calculate Your Team’s Work Hours Per Year With This Easy Guide

The vast majority of small business owners and managers know how many hours or days their team members work each week. And if they aren’t sure, all they have to do is take a quick glance at their employee schedule to find out.

But a surprising amount don’t have a clue how those numbers stack up and, ultimately, how many hours and days team members work on average over the course of a year. And if you’re not using a small business management tool like Homebase that takes care of these kinds of calculations and considerations for you automatically, you might not have any idea how to figure it out.

You’re in luck! We’ve put together this useful guide so you’ll understand.

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Why understanding work hours and days matters for small businesses

Figuring out your employees’ average annual work hours and days is more than just a matter of curiosity — the results can significantly impact your small business operations. Here are just a few of the main reasons why:

• Compliance with labor regulations — It’s essential to correctly understand your team members’ average work hours and days to comply with relevant labor laws or you risk audits, fines, and other unpleasant consequences. For example, businesses have to pay non-exempt employees 1.5x their normal hourly rate for the time they work that exceeds 40 hours in an average week. In addition, team members may have the right to certain benefits like extended leave or health coverage if they work more than a certain number of days or hours over the course of a year.

The good news is you can use an SMB-friendly tool like Homebase HR and compliance to help keep you up to date with these considerations and legal regulations.

• Allows for proactive hiring and recruitment — As a small business owner, you likely already know how many days your business is open per week and how many working hours you need to cover on average. So, accurately estimating your current team’s average annual work hours or days can help you understand whether you have enough employees to cover your labor needs or if you need to start hiring proactively. You certainly don’t want to end up in a situation where you’re scrambling to find a new staff member when your team is already stressed out and overworked.

• Better understanding of hourly rates and annual income — Knowing your employees’ average annual work hours and days gives you a better picture of their “hourly rate” (even if you pay them a salary) and/or how much money they take home yearly. This ensures that you’re paying people a fair wage and equips you with the information you need to enter salary conversations and negotiations from a well-informed point of view.

• Improved awareness of team members’ work-life balance — When you have a precise picture of the number of hours or days team members work per year, you can see how much of their time they spend at work vs. with their family and friends, pursuing their hobbies and interests, and taking care of chores or other personal responsibilities. That information may prompt you to address work-life balance issues and rethink the benefits you offer your employees. For example, you may consider providing additional PTO (paid time off) or personal days to your benefits package.

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How to easily work out employees’ average work hours and days each year

If you’re not using a handy small business management platform like Homebase, you may need to manually calculate how many hours or days your team members work per year on average. Luckily, these calculations are fairly simple to do on your own and consist of just three steps.

Basically, they can be broken down as follows:

1. Add up an employee’s average weekly work hours or days
2. Multiply their average weekly work hours or days by 52
3. Subtract public holidays, their paid time off allotment, and other expected absences

1. Add up weekly work hours or days

First, calculate how many hours or days the team member works in a typical week. These numbers might be the same for all employees or vary greatly depending on how regular your staff schedules are.

In the United States, the typical full-time work schedule consists of 40 hours distributed over five days, usually Monday through Friday. However, small businesses, especially those in customer service industries like hospitality, often have more irregular timetables as they’re open in the evenings and over the weekend.

Let’s consider a couple of examples:

• Amanda works for a construction company. She normally works 10 hours per day from Monday through Thursday. She begins work at 7am and finishes at 5pm. So, on average, she works 40 hours per week and four days per week.
• Mark is a manager at a local children’s clothing store. He usually works 8 hours per day from Wednesday through Sunday. He begins work at 10am and finishes at 6pm. So, on average, he works 40 hours per week and five days per week.

Pro tip: Be sure you’re calculating the individual’s working hours or days in a normal week as you’ll be using this total as the average for the entire year.

2. Multiply average work hours or days by 52

There are 52 weeks in a calendar year, so next, all you have to do is multiply the employee’s average amount of weekly work hours or days by 52. Let’s continue with the examples we used in the previous step:

• Amanda works 40 hours and four days in an average week. So, she would have 2080 possible working hours and 208 possible working days per year.
• Mark works 40 hours and five days in an average week. So, he would have 2080 possible working hours and 260 possible working days per year.

Don’t rush off! Our work isn’t done yet because not many people actually work all of their possible working days or hours each year. We still need to account for public holidays and other variables like paid time off, sick leave, and other foreseeable workplace absences.

Pro tip: Learn how Homebase’s scheduling, payroll, and HR and compliance tools work together to help you manage your employees’ paid time off (PTO) for you with this informative video.

3. Account for public holidays, paid time off, and other foreseeable absences

Depending on established public holidays, the local and federal labor laws that apply to you, and your own internal policies, your team members will be allocated a certain amount of working days off per year for things like holiday, sick leave, and other personal reasons.

So, to correctly estimate your employees’ average working hours or days per year, you need to consider those fixed absences ahead of time. Of course, there may be some slight discrepancies between how many vacation days team members are allocated and how many they end up taking, but we’re talking about averages rather than fixed numbers.

Using the previous example, let’s imagine that Amanda gets all 11 federal public holidays per year off work. She also gets another ten working days of paid vacation, five sick days, and five personal days. That amounts to 31 working days or 310 working hours off per year.

On the other hand, Mark gets all 11 federal public holidays off work but is also entitled to another three because he lives and works in Texas, and the state has several regional public holidays. His employer also gives him 15 working days of paid vacation, five sick days, and two personal days. That amounts to 36 working days or 288 working hours off per year.

Now, we have to subtract Amanda and Mark’s expected days and hours off from the total we came up with in the previous step:

• 2080 (Amanda’s possible working hours in an average year) - 310 (Amanda’s expected hours off in an average year) = 1770 (Amanda’s expected working hours in an average year)
• 208 (Amanda’s possible working days in an average year) - 31 (Amanda’s expected days off in an average year) = 177 (Amanda’s expected working days in an average year)

• 2080 (Mark’s possible working hours in an average year) - 288 (Mark’s expected hours off in an average year) = 1792 (Mark’s expected working hours in an average year)
• 260 (Mark’s possible working days in an average year) - 36 (Mark’s expected days off in an average year) = 224 (Mark’s expected working days in an average year)

Homebase makes small business admin easy

At face value, understanding the average number of working hours and days your team members complete each year may not seem important. But it’s useful information for both small business owners and employees to understand because it supports you in staying compliant with local labor regulations, informs proactive hiring and recruitment decisions, provides a better picture of team members’ hourly rates and annual take-home income, and helps you uncover work-life balance issues.

In addition, as we’ve seen, it’s not too difficult to calculate average annual work hours and days — simply follow the steps we outlined above. However, as a small business owner, there’s no such thing as saving yourself too much time. So, why not use specialized small business tools like Homebase payroll and HR and compliance to take care of those calculations and considerations for you?

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