Businesses go through this every month, every 15 days, every two weeks, every week, and I have even heard from a few businesses that do this every day! The task consumes a ton of time and you didn’t envision it in your dreams of small business ownership. Worse yet, your ability to enjoy and grow your business is diminished by this task. It’s the task of processing payroll. I’m specifically referring to the head-pounding practice of using handwritten time cards and then converting time to calculate payroll hours.
Payroll companies require labor hours in a decimal format. Converting time from hours and minutes to the decimal format needed for payroll, requires us to use a 60-base number, not the usual 100-based math we are used to. It is not easy and can lead to costly errors. For example, 5 hours and 35 minutes is not 5.35 hours. Do the math. 5.35 hours is actually 5 hours and 21 minutes. The calculation is .35 x 60 = 21 minutes or 21/60= .35. I talked to a business owner recently who had an employee complain about her hours. She thought she was shorted. She was right. The owner made the mistake I just outlined. She took the example of 5 hours and 35 minutes and submitted 5.35 hours to her payroll company; for every shift for every day for 2 weeks.
A common practice for admins who calculate hand written time cards is to round hours (not recommended), so that converting time is easier. Know your state laws. This may not be legal.
To show this in the terms we know let’s look at the basic time conversion (see the last row in the chart):
- 15 minutes is a quarter of an hour, .25
- 30 minutes is a half of an hour, .50
- 45 minutes is three quarters of an hour, .75
- 60 minutes is one hour, 1.00
Feel free to print the chart as a reference when you are faced with the challenge of converting time manually. If you are a small business owner who must manually convert time for payroll hours calculations you might consider letting a timekeeping system do that for you. Chronotek can also calculate Overtime, even for semi-monthly and the special California Overtime rules. When a system does the work it will not matter how often you do payroll and the risk of error is greatly reduced. Free up your time. Eliminate your payroll headache and revitalize the small business dream you once had. We believe that you will also save money when you stop using handwritten timesheets.
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