For every business, accurate accounting of employee hours is essential. You need to be precise, as potential mistakes can become a serious problem and can even lead to lawsuits. At the same time, you want to prevent your employees from committing time theft and protect your company.

The first step to correct payroll calculation is to establish a working system for time tracking. Then you need to apply the correct method for payroll time conversion of minutes. Finally, you must multiply the hours worked by the respective wage rate and subtract taxes and deductions to get to the final payout amount.

Let’s dig into the details.

### How to calculate timesheet hours

There are many methods for calculating timesheet hours, but they all start with employees logging their time on jobs or work tasks. Their logged hours can be either dedicated to a specific project or can count for the total hours that a team member has spent working for a particular company within a time period.

Time tracking can be done by filling out paper timesheets, punching time cards, or with timesheet software. Today most companies use digital platforms to track hours.

Time clock apps have several clear benefits over old-school time cards, two of the most significant being improved accuracy and ease of use. Employees can manually enter the employee hours in a timesheet at the end of each day, or they can use a time tracking app for their time on the go.

If your system is analog, you can use free timesheet templates and a time card calculator to save time and improve your calculations’ accuracy.

You have to decide how to add up hours for payroll, and there are two primary ways to go about doing that:

1. Use the actual time that an employee has recorded. If they noted 5 hours and 13 minutes, use this number for their payroll.

2. Use rounded hours, which entails setting up your method for timesheet rounding. Then the minutes after a whole hour are rounded according to a particular process. In all cases, you should subtract any unpaid breaks and lunchtime.