How to Count Minutes as Decimals for Payroll
If you are a small business owner who processes your own payroll and you have hourly employees, you need to know know how to convert time to decimals. This conversion is necessary because you cannot calculate your employee's pay during a pay period using time, you must use decimals. After you convert the employee's time to a decimal, you can multiply the decimal by the employee's pay rate to calculate his wages.
Rounding time to the nearest quarter hour was a time-saving practice when payroll clerks processed payroll by hand. You must calculate the correct number of minutes before converting the minutes to decimals. First, divide the employee's time in minutes by 15 (a quarter of an hour), then check for a remainder. The remainder is the amount left after dividing that cannot be expressed as a whole integer. If the remainder is zero, no rounding is needed; between one and seven, round down and between 8 and 14, round up.
John works 95 minutes. 95/15 = 6 with a remainder of 5. Five is less than seven, so round the result down. Calculate John's pay using 90 minutes (15_6). If John worked 98 minutes, the remainder would have been 8. Eight is more than seven so round the result up. Calculate John's pay using 105 minutes (15_7).
The steps to transform minutes to decimals are the same whether you round minutes or you pay the exact minutes an employee works. Some systems may display time as hours and minutes. Each hour has a decimal value of one. Divide minutes worked by 60. Minutes Worked/60 = Decimal Value
Peggy's time card says she worked 4 hours and 27 minutes. Divide 27 by 60 to get the decimal value, .45. Each hour equals one, so four hours equals four. The decimal value of 4 hours and 27 minutes is 4.45. 27/60=.45 4 hours = 4 4+.45=4.45 If Peggy's time card said she worked 267 minutes, divide 267 by 60. The decimal equivalent is still 4.45 because there are 267 minutes in four hours and 27 minutes. 267/60=4.45
If you are performing these calculations by hand, using a calculator or using an adding machine, use a standard chart to find the decimal value of quarterly time values. You will not have to refer to the chart for long because there are only four values and over time, you will commit them to memory. The values are: 15/60=0.25 30/60=0.50 45/60=0.75 60/60=1.00
Spreadsheets are an optimal tool for transforming minutes to decimals. Using a spreadsheet will help reduce human error and simplify the calculation process. Place employee hours in column A, employee minutes in column B and your preferred formula in column C.
Time to Decimal Conversion Formula \=((A1_60)+B1)/60 A1_60 converts the hours to minutes. (A1_60)+B1 combines the converted hours and the minutes. ((A1_60)+B1)/60 converts the total time to a decimal.
Time to Decimal Conversion with Rounding Formula Rounding Formula: =((ROUND(((A1_60)+B1)/15;0))_15)/60 In addition to doing everything the Time to Decimal Conversion Formula does, this formula calculates quarter hour rounding.
Formulas In Action:
20 hours and 22 (remainder of 7) minutes give a decimal value of 20.37 using the basic formula, and 20.25 using the rounding formula. 20 hours and 23 (remainder of 8) minutes give a decimal value of 20.38 using the basic formula and 20.50 using the rounding formula.