Calculating employee pay isn’t difficult if you know how to express minutes as decimals. Once time worked is converted into decimal form, such as 4.35 hours, you can multiply by the pay rate and find total wages due. Failing to convert minutes when calculating pay causes errors and creates more work on the back-end.
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How Converting Minutes to Decimals Works
You must convert minutes worked into a decimal to be sure you’re not over or underpaying your employees. To perform the conversion, you can use payroll software, like Gusto, an online time calculator, a minute conversion chart, or a spreadsheet application.
It doesn’t make sense to do this using pen and paper to do payroll when there are free options, such as Google Sheets, to assist. However, it is important that you understand the process so it’s easy to check the calculation for reasonableness once it’s done. To help, we’ll cover how to convert minutes manually (using our free minute conversion chart) and using an Excel template.
Let’s review an example before we get started:
Amy worked one day this week for 5 hours and 37 minutes. She’s paid at a rate of $14.25 per hour.
The Wrong Way:
5.37 X $14.25 = $76.52
In this case, minutes worked is translated into numerical form by placing a decimal in between the minutes and the hours worked. This is incorrect, because it assumes the 37 minutes is part of 100 total minutes, instead of the total 60 minutes that are in an hour. Remember, any number to the right of a decimal is a fraction of 100. You need to show minutes worked as a fraction of 60 minutes (one hour) to calculate total pay for hours worked.
The Right Way:
Step 1: Translate minutes worked into a fraction of an hour in decimal form.
37 (minutes) / 60 (total minutes in an hour) = 0.617
Step 2: Add hours worked to minutes worked (expressed in decimal form from Step 1).
5 hours + 0.617 hour = 5.617 hours
Step 3: Multiply hours and minutes worked (in decimal form) by the hourly pay rate.
5.617 X $14.25 (Amy’s pay rate)= $80.04
In the two examples we just reviewed, the difference between converting minutes to decimals the wrong way versus the right way is that you short pay an employee for $3.52. If you make the same mistake 5 days a week for 52 weeks of the year, that could lead to a $915.20 liability you will owe in wages, not to mention the additional payroll taxes you will need to pay.
When I Work has time and attendance software that automatically converts minutes worked into decimal form in addition to calculating gross pay. Your employees can clock in and out from their mobile devices, and you can review anytime you want.
Steps to Convert Minutes for Payroll Calculation
To calculate payroll, you can convert minutes to decimals in three steps, but you’ll have to decide whether to use actual hours worked or hours rounded to the nearest quarter as allowed by federal law. It’s better to use actual hours, because rounding can cause you to pay more than necessary for wages and overtime.
We’ll show you how rounding hours worked can cost you more money later. Our free minute conversion chart will show you the corresponding decimal for minutes one through 60 to help you calculate gross pay accurately and quickly based on actual hours worked.
Here are the steps you should follow to convert your employees’ minutes worked into decimal form and dollars to be paid:
1. Calculate Total Working Hours and Minutes
Calculating total hours worked is usually straightforward if you have a time-tracking system (pen-and-paper, time clock, spreadsheet, etc.); however, if your policy requires you to round employee hours to the nearest quarter, as the Department of Labor allows, it can be tricky.
Actual Hours Worked:
To calculate actual time worked, you need to total the hours and minutes between your employee’s starting and ending times for each work day. The timesheet provides a good example of the information you’ll start with before converting minutes to decimal form.
|Clock In-Clock Out|
8 hrs, 6 mins
8 hrs, 4 mins
7 hrs, 42 mins
7 hrs, 57 mins
In the timesheet above, the employee worked a total of 38 hrs and 109 minutes or 39 hours and 49 minutes.
Hours: 8 + 8 + 8 + 7 + 7 = 38 hours
Minutes: 0 + 6 + 4 + 42 + 57 = 109 minutes
You can convert 60 minutes of the 109 minutes to one hour to make it easier for you to translate minutes into decimals in the next step (109 minutes – 60 minutes = 49 minutes; 38 hours + 1 hour= 39 hours).
Rounding Hours Worked to Quarters:
Federal law gives employers the option to calculate wages using actual hours worked and rounded hours worked. It’s up to you which method you prefer, but should you choose the rounding method, you need to know how to round correctly to maintain compliance.
You’re allowed to round employee time to the nearest quarter hour. A quarter of an hour is 15 minutes, and there are four in each hour, i.e., :15, :30, :45, :00. If your employee clocks in at any time not on a quarter, you can round. However, you can only round up to the next quarter if the time is from eight to 14 minutes past the previous quarter. If your employee’s time is from one to seven minutes past the previous quarter, you must round back down.
Let’s use the sample timesheet above in an example to round hours worked:
Example: On Tuesday, your employee clocks in at 8:04 a.m. He leaves at 4:10 p.m. and didn’t take a break. Actual time worked is 8 hours and 6 minutes. Rounded hours worked is 8 hours and 15 minutes.
8:04 a.m. must be rounded down to 8:00 a.m., because it’s not more than seven minutes past the previous quarter (8:00 a.m.). 4:10 p.m. must be rounded up to 4:15 p.m, because it’s more than seven minutes past the previous quarter (4:00 p.m.). The employee’s timesheet would reflect 8:00 a.m. to 4:15 p.m., 9 minutes more than actually worked.
The differences that arise with rounding your employees’ working hours can add up over time. In our example, it was in the employee’s favor, which meant you would be paying for more time than was actually worked. Paying for an additional nine minutes for three days a week throughout the 52 weeks in a year would equal an extra 468 minutes or 7 hours and 48 minutes of non-working time you’d be paying for.
The impact of rounding can be inconsistent each week, depending on your employees’ work habits, so it’s not the best idea to adopt a policy of rounding hours worked in hopes of manipulating it in your favor. After you’ve decided whether to pay employees based on actual hours worked or rounded hours worked, you can sum your employees work time for the week and prepare to convert minutes to decimals.
2. Convert Minutes to Decimals
Converting minutes to decimals is as simple as dividing minutes by 60. The good news is you can skip that step if you use our minute conversion chart. In the chart, simply find the minutes worked, between one and 60, and the decimal equivalent will be to its immediate right. For instance, the decimal equivalent of 1 is .02. Once you have the decimal, add it to the number of hours worked.
Let’s look at the sample timesheet again (see below) and convert Tuesday’s actual time worked to a decimal. The employee worked 8 hours and 6 minutes. Per the minute conversion chart, 6 minutes is the same as .1. Add the decimal to the number of hours worked to get the total time worked in numeric form, like this: 8 hours + .1 hours = 8.1 hours. The employee worked 8.1 hours on Tuesday.
|Clock In-Clock Out|
8 hrs, 6 mins
8 hrs, 4 mins
7 hrs, 42 mins
7 hrs, 57 mins
3. Multiply Time Calculated and Wage Rate
Now you’re ready to use the time you converted into decimal form to calculate how much you need to pay your employee. Let’s assume the employee’s hourly wage is $14.25. You owe $115.43 for the hours worked on Tuesday.
$14.25 (hourly wage) X 8.1 (time in decimal form) = $115.43
Convert Minutes in Excel
Learning how to convert minutes for payroll manually isn’t the only option you have. You can also use Excel to help automate the process. We created a template you can use with Instructions on the first tab.
Converting Minutes for Payroll Frequently Asked Questions (FAQs)
This article covers the basics of converting minutes for payroll.
Some common questions regarding how to convert minutes for payroll are:
How do I calculate minutes for payroll?
To calculate minutes for payroll, you must convert minutes worked to decimal form. Do this by dividing the minutes by 60. Then, multiply your answer by the employee’s hourly rate to get the amount you need to pay for those minutes. Next, multiply the hours worked by the pay rate. Add the amount you owe for hours worked to the amount you owe for minutes worked to get a total of what is due.
What is 1 hour and 15 minutes as a decimal?
One hour and 15 minutes as a decimal is 1.25. To calculate, convert the hours and minutes to minutes. 1 hour = 60 minutes ; 60 minutes + 15 minutes = 75 minutes. Then divide the minutes by 60 to find the time in decimal form. 75 minutes / 60 = 1.25 hours
How does rounding hours worked affect overtime?
Assuming you schedule your employees on quarter hours, :00, :15, :30, or :45, if your full-time employee clocks in eight to 14 minutes earlier than scheduled, you must round back to the prior quarter. This means you will pay for an extra 15 minutes. For five days, this equals an extra hour and 15 minutes, which will result in overtime pay (time & a half) if the total is over 40 in a workweek.
Converting minutes for payroll can take little to no time depending on whether you use rounded or actual hours worked, how you track working hours, and what tools you use to calculate. Your main goal is to translate time worked into decimal form, so you can multiply by your employee’s pay rate and find how much you owe in wages.