Payroll is one of the largest expenses within any company, whether large or small. There are ways for employers to make this process difficult or easy. The difficult way is to use a manual process that requires tedious tasks with a calculator or spreadsheet.
The easy way is to seek efficient and accurate processes. An electronic employee time clock calculates hours worked in real-time. You are no longer stressed trying to figure out how to calculate payroll hours – the system does it for you!
Different Calculation Systems
To get totals, you can either round up or down. Rounding up is the quickest way to pay employees more than they have technically earned. The unwritten law says this is a way to make sure inaccuracies work in employees’ favor. Yet, this calculation can leave you shortchanged.
Rounding down could put you on a fine line between saving money and violating an employment regulation standard.
A more accurate way of calculating is to do so without rounding. The easiest way is to use a system that automatically converts hours worked into minutes. Next, you would multiply total minutes by the employee’s hourly rate.
Minutes are converted back to hours without having to round up or down.
What the Fair Labor Standards Act (FLSA) Says about Payroll Calculations
Ensuring your company stays within the approved labor practices for rounding requires knowing what FLSA says about the issue. Many employee time tracking systems are developed with lawful ways to keep track of paying employees for their actual time.
Implementing some form of rounding to track employee time and attendance is routine for most workplaces. However, FLSA regulations hold employers to a strict set of standards. This is done to make sure employees receive a fair compensation for the time they have actually worked.
The law is not opposed to employers rounding their employees’ time. However, it cautions employers that rounding down to the nearest quarter hour could violate minimum wage and overtime requirements.
Reasons a Software Program Works Best for Calculating Payroll Hours
Tools that can simplify the payroll process while ensuring your company remains compliant with FLSA is definitely something you want in your arsenal. Employees are content with their pay and your company is not hit with heavy fines. Here are a few reasons why a software program works best.
Accurate Calculations
Errors such as forgetting to add some hours into an employee’s final pay can have a direct impact on the company. A reliable method for calculating payroll makes it easier to complete. As employees enter their time, the system tallies their hours.
By the time you need to close out payroll, all you or department managers need to do is approve the hours. A consistent process that helps improve accurate calculations will also ensure you stay compliant with fair wage laws.
Efficient Process
Leave details to other areas of your company and opt for an efficient way to pay employees. Delays or incorrect recordings of the hours each employee works just adds unnecessary stress.
With the competition getting stronger as margins tighten, you do not need to shift all of your focus and energy to payroll processing. Utilizing an automated time and attendance system ensure an efficient way to keep track of hours worked.
Faster Solution
There are more ways than one to calculate payroll hours. However, manual tabulations from paper time cards does not have to be one of them. Instead, an automated payroll tool includes:
- Fast calculations of hours worked per pay period
- Fast approval of timesheets by managers
- Fast upload to a third-party payroll processing system
Production chokes when too much time is spent making sure employees are paid accurately and on time. Installing a software system not only takes care of payroll, but it also helps to improve the number of hours each employee works.
Satisfied Employees
Employees expect to receive their full paycheck on payday. It is a fair trade that makes sure the employer-employee relationship continues to work. An honest days’ pay for an honest day’s work. If employers cannot keep their end of the bargain, they are asking employees to leave.
Whether employees receive a paper check or have their money directly deposited into a bank account, they expect the right paycheck. Having correct calculations ensures employees are not financially inconvenienced.
As a small business owner, it is your responsibility to make sure payroll calculations are recorded correctly. Staying compliant overtime pay and minimum wage requirements is a cinch when you take advantage of programs on the market.
These systems are designed show how to calculate payroll hours in one fair setting. With one less thing to worry about, you can continue growing the business while keeping employees happy.
