Most large corporate organizations use the time and attendance software to maintain effective payroll hours/ minutes records for quick processing, and access on the computer. If you are not using the payroll software, the other way out is to calculate the hours/ minutes manually for each employee.
How to Calculate Hours and Minutes for Payroll Manually
Herein is a step-by-step guide on how to calculate payroll hours and minutes manually for help in case you are not using Payroll employee time clock software.
1. Gather the Information before Proceeding for the Manual Payroll Time Calculation
You need the information like the hourly pay rate for each designation. Prepare a list of all the employees with the logged in time.
2. Convert the Pay Rate in Minutes
If the pay rate data is available for hourly work, divide the amount by 60 to get the rate in minutes. For instance, if the hourly rate is $30, the pay rate in minutes will be 50 cents.
3. Convert the worked time for Each Employee in Minutes
Add up the total hours worked for each employee. Now multiply this result by 60 to get the time in minutes. Now add the minutes worked to the calculated result for each employee. For instance, if an employee has worked for 15 hours and 50 minutes, then first multiply 15 by 60 and then add 50 to get the result. The result is 900 minutes added to 50 minutes summing up to 950 minutes.
4. Calculate the Total Payroll for Each Employee
In this step, you need to multiply the total minutes worked by each employee to the minute pay rate for the concerned designation. For instance, if the minute pay rate is 30 cents and the logged in time is 1000 minutes, the payroll $300.
Essential Factors of Consideration When Calculating the Payroll Time Manually
The companies not using the electronic timekeeping system on the computer need to use the time stamps for getting the hours logged in by the employees. When processing the payroll to prepare the payouts for the entire workforce, here are some key factors to consider.
There are two options to calculate the time worked by each employee. You can either convert the time in minutes and use the minute pay rate for calculation or go for the rounding up the logged time. When rounding up the time, you need to covert the minutes into hours before calculating the payroll.
Determining the Payout for Break Periods
The payout policies for the break periods differ from one company to another. If there are pay exemptions during the break period, the authorities must ask the employees to enter the punches before and after the breaks to calculate the time precisely.
Overtime Laws and Exemptions
The company authorities need to abide by the federal laws pertaining to overtime payouts to avoid penalties or other consequences. According to the rule, the workers are eligible for the overtime payouts only after working at least 40 hours a week.
Payroll Calculation is done on Weekly Schedule
Whether using the computerized employee time clock software or a manual process, you must calculate the payroll for every week for each employee. The process has nothing to do with the payout frequency. The company can pay the workers monthly, weekly, bi-weekly etc.
The manual payroll time calculation can be a time consuming task that keeps becoming a strenuous affair if there is a huge working staff in the organization. There are chances of getting frequent errors during the calculation process.
The above-mentioned guide to manual payroll calculation shows the process without rounding up the time logs. The process is helpful but for enterprises with more than 20 employees, I personally recommend using a payroll clock in software for hassle-free calculation and record maintenance.