How to Calculate Payroll Time in Quarters

by Ryan Donovan; Updated September 26, 2017
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Time and labor management systems convert recorded hours for each employee to decimal format. This must be done since hours are converted to wages, which are in decimal format. Conversion from one format to another can be done manually once you know the basics. A calculator, while not required, is advised. Making errors when calculating wages is something to avoid. There are several tips that make this process quicker to do and quicker to check.

Step 1

Tally up the total hours worked for each employee you wish to analyze. If there are multiple workweeks involved, the hours need to be broken up by week before moving forward.

Step 2

For each total weekly amount of hours worked, the numbers before the decimal point is the total amount of hours. This part of the number is not changing. For example, if the time worked in a week is 35 hours and 23 minutes, the numbers before the decimal point post-conversion will be 35. It is the minutes that appear after the decimal point and thus must be converted.

Step 3

For minutes, take the number of minutes and divide by 60. Using the example mentioned in step 2, 23 divided by 60 would be 0.38 (rounded to the nearest hundredth)

Step 4

Analyze which fifteen-minute increment your answer from step 3 is closest to numerically. Your four possibilities are 0.25 (15 minutes after the hour), 0.50 (30 minutes after the hour), 0.75 (45 minutes after the hour), and 0.00 (top of the hour). Using the example mentioned in the previous steps, the closed increment would be 0.50. Since the hours number is not changing and since 0.50 is the closest decimal increment, 35 hours and 23 minutes would convert to 35.50 hours in decimal form.

Tips

  • As noted in the steps, each fifteen minutes of an hour would be one-fourth (0.25) of a whole hour.

    Rounding up or down is acceptable from a legal standpoint as long the closest increment is always honored consistently. Always rounding up is also acceptable but always rounding down is not. If in doubt, favor the employee.

Warnings

  • If doing conversions manually, double-check your work. Better yet, do it twice in full to verify. Doing otherwise can quite easily lead to under-payments or over-payments to employees.

    The only three acceptable techniques when computing hours worked in decimal is rounding to the nearest hundredth, rounding to the nearest tenth (six minutes), and rounding to the nearest quarter hour (fifteen minutes).

About the Author

Ryan Donovan has worked in payroll and human resources since 2004. A certified payroll professional with the American Payroll Association, he also holds an M.B.A., a master's degree in human resources and a B.A. in information technology from Ottawa University in Ottawa, Kan.

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