Time Conversion Chart for Payroll
Written by: Natalie Fell
Natalie is a writer with experience in operations, HR, and training & development within the software, healthcare, and financial services sectors.
Reviewed by: Daniel Eisner
Daniel Eisner is a payroll specialist with over a decade of practical experience in senior accounting positions.
Updated on July 14, 2023
Time Conversion Chart for Payroll
If your business has hourly employees, calculating their hours is essential to paying their wages. When the math involves full hours, it’s fairly straightforward. But things get a bit more complicated when you take fractions of hours into account.
The good news is that making accurate calculations is simple when you have the right tools. Keep reading to learn the best ways to make time conversions for your payroll.
Why Is Time Conversion Important?
Making accurate time conversion calculations is crucial to your business success – without them you could end up overpaying your staff and undermining your operations budget. Underpayments are a hassle to correct.
One of the most common mistakes is forgetting that one minute is 1/60th of an hour, not 1/100th. If an employee worked five hours and 15 minutes, for instance, the decimal equivalent would not be 5.15, but 5.25, because 15 minutes is one quarter (.25) of an hour.
The conversion calculations outlined below will help you convert time into decimal hours.
How To Convert Minutes to Process Payroll
If you’re new to processing payroll or converting time, having to do decimal calculations might seem overwhelming. Fortunately, the conversion to decimal format can be easy as long as you follow a few key steps and use the decimal conversion chart included below.
Step 1: Calculate Working Time
When calculating working time, you can decide whether to calculate the actual hours worked or round the number of hours up or down.
If you decide to use actual hours worked, you’ll need to gather the total hours and minutes each employee worked during a pay period. This information should be on their timesheets, and you’ll need to add up the hours and minutes separately.
For example, if your employee worked eight hours and 20 minutes on each of five workdays last week, that’s 40 hours (8 X 5) and 100 minutes (20 X 5). Next, convert those minutes into hours: 100 minutes breaks down into an hour and 40 minutes. Thus, the employee’s total work time for last week is 41 hours and 40 minutes.
Federal law also allows employers to round their employees’ hours to the nearest quarter of an hour. If the recorded time is 1-7 minutes past the previous quarter, round down. If the recorded time is 8-14 minutes past the previous quarter, round up.
So if your employee clocked 5:54 (5 hours, 54 minutes) in working hours last Thursday, you would round up and record that as 6 hours worked.
Step 2: Convert Minutes to Decimals
Once you have the total number of hours and minutes worked, convert the minutes to a decimal by dividing them by 60.
For example, if your employee worked 41 hours and 40 minutes, the decimal figure would be 41.67 (40 / 60 = .67).
Alternatively, you can use this simple chart to convert your minutes to decimals.
Step 3: Multiply Time By Pay Rate
The last step in hourly time conversion is to figure out how much pay your employee’s owed.
Let’s say you have an employee who worked 35 hours and 15 minutes in a week, or 35.25 hours (see decimal conversion chart above). Next, multiply 35.25 by their hourly rate. So if they make $20 per hour, you would do 35.25 X $20 = $705 in gross wages.
Time Conversion Tips
Making decimal calculations manually can be cumbersome and leave you open to payroll errors. A spreadsheet can help you organize. If you’re spreadsheet savvy, you could even build in specialized formulas to simplify decimal calculations.
Using payroll software is an even better option. Most of today’s payroll software programs make these calculations automatically and work in tandem with time tracking tools. If you use a payroll service provider to handle payroll processing, they will also make the decimal calculations on your behalf, saving you a ton of time and energy.
The goal of a payroll run is to accurately pay employees, and time conversion calculations are an essential part of that. When your calculations are correct, you’ll reduce your risk of payroll errors, which are often a hassle to correct. You’ll also have happier employees and a smoother running business.
With a bit of organization, or a little investment, you can ensure quick and accurate payroll processing for your business.