For a small business with few employees, calculating time cards manually might make more sense than investing in an automated timekeeping system. The rules for calculating time cards are set by the Wage and Hour Division of the U.S. Department of Labor under the authority of the Fair Labor Standards Act. Regulations for calculating hours worked and for recordkeeping are flexible enough for you to establish procedures that suit your business needs.

Work Hours

You must have a time card for each employee who is covered by the minimum wage and overtime provisions of the FLSA. The procedures you use to calculate time cards manually must provide complete and accurate information. The DOL suggests time cards include the day, date and total hours worked each day in addition to the times a worker clocks in and out.

What Time Is Paid

FLSA rules state that insignificant amounts of time that cannot be reasonably measured may be disregarded. For example, when several workers clock in at the same time, there will necessarily be a few minutes variation in the clock times. You have to pay workers for short breaks of 5 to 20 minutes, so don’t deduct these when calculating time worked. Meal breaks of 30 minutes or longer can be deducted from the time recorded on a time card. Workers who voluntarily arrive early or stay late are not entitled to be paid for the extra time unless they are actually working.


To calculate time cards manually, subtract the starting time from the ending time stamped on the card. You can round off the clock time to the nearest 5- to 15-minute interval. The Department of Labor does not prescribe any method of calculation, but does require that the method you use insure an employee is not undercompensated for time worked. For example, if your company policy is to pay based on tenths of an hour, an employee who works 8 hours and 10 minutes would be credited with 8.2 hours worked. Each worker covered by the minimum wage and overtime provisions of the FLSA must have a stated hourly wage and must be paid one and one-half times this stated rate for all hours worked over 40 hours in a week.


Keep time cards and work schedules for at least two years. Records of hours worked each week must be kept for three years. The DOL does not mandate the format of these records, but they must be available for inspection by department representatives. In addition to the information discussed above, keep records of the employee’s name, Social Security number and address. A worker’s gender and occupation must be included along with the date of birth if the worker is a minor.