Payroll - Rounding Reported Hours | Human Resources (2024)

FAQs

How do you round up payroll hours? ›

Time clock round is the strategy and process an employer uses to round an employee's logged hours, usually to simplify payroll and invoicing. How does time clock rounding work? The most common time round strategy rounds minutes 1-7 down to the nearest quarter hour and minutes 8-14 up to the nearest quarter hour.

Timesheet rounding cannot favor the employer: If you most often round your employees' timesheets to benefit your business, you are likely breaking the law. The maximum amount of time that can be rounded to is 15 minutes: While you can choose to round to the nearest five or 10-minute mark, 15 minutes is the maximum.

If they clock in between 0-7 minutes past the quarter-hour mark, it's rounded down, and if it's 8-14 minutes past, it's rounded up. For instance, clocking in at 8:07 AM becomes 8:15 AM, while 8:14 AM remains 8:15 AM.

Rounding should be used if the time in/out does not fall on the quarter-hour as well. Time worked of 7 minutes or less should be rounded down, and time worked of 8 minutes or more should be rounded up to the next quarter hour.

Some employers track employee hours worked in 15 minute increments, and the FLSA allows an employer to round employee time to the nearest quarter hour. However, an employer may violate the FLSA minimum wage and overtime pay requirements if the employer always rounds down.

To calculate hours and minutes for payroll, first, total all the hours and minutes worked by each employee during the pay period. Then, convert the minutes into decimal form (60 minutes = 1 hour) and multiply the total hours worked by the employee's hourly rate to compute their pay.

Here's the general rule for rounding: If the number you are rounding is followed by 5, 6, 7, 8, or 9, round the number up. Example: 38 rounded to the nearest ten is 40. ¹. If the number you are rounding is followed by 0, 1, 2, 3, or 4, round the number down.

To round a number to the nearest integer—which is a whole number in this case—you need to look at the tenths digit. If the number you are about to round is followed by 5, 6, 7, 8, 9 round it up. And if it is followed by 0, 1, 2, 3, 4 round the number down.

Rounding should be a two-way conversation. Leaders should actively listen to employees, ask open-ended questions, and encourage honest feedback. This open dialogue fosters trust and allows employees to voice their concerns, suggestions, and challenges.

What is the IRS rounding rule? ›

If rounding is used, it must be used consistently. Withheld tax amounts should be rounded to the nearest whole dollar by dropping amounts under 50 cents and increasing amounts from 50 to 99 cents to the next dollar. For example, $2.30 becomes $2 and $2.50 becomes $3.

Now that "everyone" has a calculator that will give a result to six or eight (or more) figures, it is important that we know how to round the answer off correctly. The typical rule taught is that you round up with five or more and round down with four or less.

If an employee clocks in at 8:58 and out at 4:56, their timesheet should read 9:00 in and 5:00 out. Round all clock-in times to favor the employee and all clock-out times to favor the employer. In the above example, the employee's timesheet would have an 8:55 clock-in time and a 4:55 clock-out time.

It's pretty simple: you have 4 intervals of 15 minutes in an hour. To round them off, you use blocks of 7 minutes. For example, if an employee worked for 34 minutes, the amount is rounded off to 30 minutes. If they worked for 38 minutes, the amount is rounded off to 45 minutes.

According to the FLSA (Fair Labor Standards Act), employers can round their employees' clock-in and clock-out time to the nearest 5 minutes, the nearest one-tenth of an hour or 6 minutes, or the nearest quarter hour or 15 minutes.

Let's say another employee worked 7 hours and 45 minutes. To convert this to decimal form, you would divide the minutes worked by 60, which gives you 0.75. Then, you would add that decimal to the total number of hours worked, which gives you 7.75 hours.

One method of rounding is the 7/8 minute rounding rule: 7 minutes round down and 8 minutes round up.

Add up the total hours an employee worked each day. You can do this by subtracting the employee's start time from their end time for each workday. Make sure to subtract any non-compensable breaks (e.g., lunch). Then, add together all hours worked during the pay period.