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Figuring out how to track employee hours doesn’t have to turn into another administrative headache. The goal is to have a timekeeping process employees can follow consistently, and managers can review without spending payroll day chasing missing punches, correcting totals, or sorting through different versions of the same timesheet.
Good employee timekeeping also gives you a clearer record of hours worked, overtime, attendance, and labor costs. As your team grows, having a reliable process for tracking employee hours can make payroll easier to manage and help you spot scheduling or staffing issues before they become recurring problems.
The best setup is the one that fits how your employees actually work. Below, I’ll walk through common employee time tracking methods, where each tends to work well, and the tradeoffs worth considering before you choose one.
Want a more connected timekeeping process? QuickBooks Workforce offers mobile and kiosk clock-ins, scheduling, customizable reports, and a view of who’s currently working.
Ways to track employee hours
The six methods below range from basic paper records to systems that manage time, attendance, schedules, and payroll data together. There is some overlap between them. For example, time tracking software may also include a mobile app or shared kiosk, so think of these as different ways to build your process rather than completely separate categories.
1. Time tracking software
Time tracking software brings employee hours into one digital system. Employees may clock in from a computer, phone, or shared device, while managers can correct entries and approve timesheets before payroll.
Depending on the software, you may also be able to:
- Track hours by job, project, or customer
- Record breaks, paid time off, and other time away
- Flag missing or incomplete entries
- Create schedules and time reports
- Send approved hours to payroll or other connected systems
If managers spend every pay period fixing missed punches, gathering timesheets from different places, or entering the same information more than once, digital tracking can cut down some of that cleanup.
Software like QuickBooks Workforce, for example, lets employees track their own time from the Workforce app and submit timesheets for review. Managers can also create schedules and see who is currently on the clock.
Looking for more options? Read our guide to the best time tracking software to find one that fits your needs.
2. Time and attendance software
Time and attendance software puts more emphasis on when employees work, not just the total number of hours they record. It can help you compare scheduled and actual time and spot attendance issues that may otherwise get buried in individual timesheets.
Common features include:
- Employee scheduling
- Overtime alerts
- Break and attendance tracking
- PTO and time-off records
- Late clock-in and early clock-out alerts
- Attendance and labor reports
Restaurants, retailers, healthcare practices, warehouses, and other businesses with shift-based teams often have plenty of moving pieces to manage. Seeing attendance and schedule exceptions in one system makes recurring issues easier to identify.
Time and attendance software still needs a sound process behind it. Clear timekeeping policies, accurate records, and consistent manager follow-up remain important even when alerts and calculations are automated.
Learn more about the best time and attendance software and find options that may offer a broad set of adaptable features for your business.
3. Mobile time tracking apps
Mobile time tracking apps give field and remote employees a way to record their hours without returning to a shared clock. They work well for construction crews, technicians, home service workers, sales teams, and others who move between locations during the day.
Depending on the app, employees may be able to:
- Record start and end times from a phone or tablet
- Log meal or rest breaks
- Assign hours to specific jobs, customers, or projects
- Check schedules and upcoming shifts
- Submit time-off requests
- Use location-based tools to verify where a punch occurred
With software like QuickBooks Workforce, GPS points are saved while employees are clocked in through its mobile app. It also supports geofencing for location-based clock-in/out reminders and punch restrictions.
For mobile teams, those controls can give managers more context around where time was recorded. For employees who report to one fixed workplace, they may not add much value. If you use location tracking, tell employees what data is collected, when tracking occurs, and how the information will be used.
For more mobile-focused options, see our best time tracking apps guide.
4. Spreadsheet time tracking
Spreadsheet time tracking handles basic timekeeping without requiring a software subscription. Employees enter their start and end times into an Excel or Google Sheets template, and formulas calculate their hours.
For a small team with straightforward schedules, spreadsheets offer a few advantages:
- Little or no added software cost
- Familiar tools that employees and managers may already use
- Easy sharing and digital storage
- Flexible templates for basic time records
However, spreadsheets leave room for accidental edits, broken formulas, and version-control problems when several people work in the same file. Someone still needs to check the entries before the hours are finalized.
Spreadsheet formulas deserve some attention as well. A well-built template can calculate total hours, overtime, PTO, and wages, but it only follows the formulas entered into it. It does not automatically know which overtime or break rules apply to your business.
For free time card templates, check out our free downloadable timesheet templates for your business.
5. Physical time clocks
Businesses that need their on-site employees to “punch in” for their shifts or workday can benefit from using a physical time clock. You may use a wall-mounted or biometric time clock depending on your specific business need. Physical time clocks are especially useful for factories and warehouses that employ a lot of workers with different schedules.
Wall-mounted time clock
Wall-mounted time clocks are suitable for businesses such as factories or warehouses. These typically have in-house employees who are required to log their time when they arrive, leave for breaks or lunch, and leave for the day.
With a wall-mounted time clock, the company clearly understands the hours each employee physically worked, so it pays accordingly. A disadvantage is that this system only works for employees physically in an office or factory and does not account for remote employees. Wall-mounted time clocks can be purchased on Amazon or at most office supply stores, costing anywhere from $100 to more than $1,000.
Biometric time clock
Biometric tracking relies on certain biological features, such as a fingerprint scan or facial recognition, to track time. This type of tracking verifies the employee’s identity and can prevent employees from buddy punching—which, in turn, cuts down on time theft by reducing the chances of employees being paid for the time they did not work.
Biometric data is valuable to companies that may need to control access throughout their office or physically identify employees as they enter and leave a building. Before adopting fingerprint or facial recognition, check the rules that apply where your employees work and ask the vendor how biometric information is stored, protected, retained, and deleted.
These time clocks can also be purchased on Amazon and at most office supply stores. Prices range from $150 to more than $500.
Review our best employee time clocks guide to help you find an option that fits your requirements.
6. Manual employee time tracking
Manual time tracking—also known as pen-and-paper tracking—involves employees recording their own time on a handwritten piece of paper. However, this method can lead to issues (such as time theft, accounting errors, payroll issues, and labor law violations) and is not recommended for small businesses.
Although manual time tracking is a valid way to track employee hours, it does not offer the accuracy and security of time-tracking software. Even though this is a free method, the limitations become more noticeable as the number of employees and time records grows:
- Employees may forget to record or correct their hours
- Managers have to verify and calculate totals manually
- Paper records can be lost or damaged
- Changes can be difficult to trace
- Unusual or inconsistent entries may be harder to spot
Federal rules do not require employers to use a specific type of time clock. The U.S. Department of Labor allows employers to choose their timekeeping method as long as required records are complete and accurate.
For a handful of employees with uncomplicated schedules, paper records may do the job. Once payroll day routinely involves hunting down missing timesheets or recalculating totals, though, the administrative work can outweigh the money saved by keeping the process on paper.
How to choose an employee time tracking method
There is no single employee time tracking method that fits every small business. I’d start with how your employees actually work and where the current process creates the most friction.
A spreadsheet may be enough for five employees who work predictable office hours. A shared time clock could be easier for 30 people reporting to one warehouse. A field crew may need mobile access because employees start and finish their days at different locations.
As you compare your options, consider:
- Where employees work: On-site teams may be comfortable with a shared clock, while field and remote employees usually need browser or mobile access.
- What you need to record: Basic clock-in and clock-out times may be enough for one business. Another may need job codes, billable hours, project costs, breaks, or multiple pay rates.
- How corrections work: Missed punches happen. Employees should have a clear way to report them, and managers should be able to review changes without losing track of the original record.
- How hours reach payroll: If approved time has to be typed into another system, every handoff creates another opportunity for an error.
- Whether location or identity controls solve a real problem: GPS, geofencing, and biometric verification have legitimate uses, but they also add privacy considerations and sometimes additional cost.
- How easy the process is for employees: A sophisticated system will not improve your records if employees struggle to use it consistently.
Pay close attention to what happens in the day or two before payroll. Repeated requests for missing hours, corrections scattered across email or chat, and managers comparing several versions of a timesheet are all signs that the process needs attention.
Connecting timekeeping more closely with payroll may also remove some manual steps. QuickBooks Workforce, for example, can send tracked and approved hours directly to the payroll module, so you don’t have to enter them again. See how a connected workflow can save time before payday.
Reasons to track employee hours
Aside from keeping track of the number of hours an employee works, there are several other reasons to track employee hours.
Process payroll accurately
To accurately calculate payroll, you must know each employee’s salary or time worked per pay period. Timesheets also help by tracking paid time off and accruals. Automated time tracking can streamline your payroll process by reducing timesheet errors and can eliminate the need for a large payroll department.
Monitor employee attendance
Recorded time serves as an employee attendance tracker for your employees. Based on the hours logged, you can manage employee attendance issues by determining whether an employee worked their full scheduled workweek, took paid time off, or was short on hours.
Further, time tracking gives a clear view of how long it takes employees to get tasks completed. Time records also show patterns that a weekly schedule alone may miss, such as repeated late arrivals, early departures, missed shifts, or unexpected overtime.
Those patterns do not always point to an employee problem. If the same department regularly stays late, for example, the schedule may be too lean, or the workload may have changed. The records give managers something concrete to review before deciding what needs fixing.
If attendance is becoming a recurring concern, a clear clock-in and clock-out policy can set expectations around punches, breaks, corrections, and approvals.
Maintain required time records
The Fair Labor Standards Act (FLSA) does not require a particular type of time clock or software. Covered employers do, however, need to maintain certain wage and hour records, with additional hours and pay information required for nonexempt employees. That includes the hours worked each day and the total hours worked during each workweek.
Under federal rules, employers generally need to keep payroll records for at least three years. Records used to calculate wages, such as timecards and work schedules, generally need to be retained for two years.
State and local requirements may go further, so federal recordkeeping rules are a starting point rather than the whole compliance picture. Our payroll compliance guide covers other common requirements small employers need to watch.
Understand labor and project costs
When employees record hours by job, customer, department, or project, the same time data can show where labor dollars are going.
A service company might discover that work estimated for eight labor hours regularly takes 12. A restaurant may find that one shift consistently uses more labor than expected. Those patterns can inform future schedules, staffing levels, project estimates, and pricing.
Employee timekeeping best practices
Once you’ve chosen a timekeeping method, a few simple practices can help keep employee records accurate, consistent, and easier to review:
- Use one primary source for employee time. Avoid routinely collecting hours through a mixture of text messages, paper notes, spreadsheets, and verbal corrections. When several records exist for the same shift, managers have to figure out which one is authoritative.
- Set clear clock-in and clock-out expectations. Employees should know when to record time, how breaks are handled, what to do after a missed punch, when corrections are due, and who approves the final timesheet.
- Have employees record time as they work. Rebuilding an entire week from memory makes mistakes more likely. Encourage employees to report missed or incorrect punches as soon as they notice them.
- Review exceptions, not just totals. Missing punches, unusually long shifts, duplicate entries, unexpected overtime, and hours assigned to the wrong job deserve a closer look before approval.
- Keep employee monitoring tied to a business need. GPS, geofencing, and biometric tools collect more information than a basic timecard. Explain why the business uses them, when tracking occurs, and what happens to the data afterward.
- Revisit your process as the team changes. A spreadsheet that works smoothly for four employees may become difficult to manage at 20. Hiring more people, adding locations, or introducing different schedules can all be good reasons to reassess how you track employee hours.
Tracking employee hours frequently asked questions (FAQs)
What counts as hours worked under the FLSA?
Hours worked generally include time an employee is required or allowed to perform work, even when that work happens outside the scheduled shift. Certain waiting time, short rest breaks, job-related travel, and training may also count depending on the situation, so employers should focus on the time employees actually spend performing compensable work.
Can I use GPS tracking to monitor employee hours?
GPS tracking can be used for employees working off-site or on the road, but you should establish clear policies and obtain employee consent to address privacy concerns.
How can I protect employee privacy while tracking their hours?
Implement strict data privacy policies, inform employees of the tracking methods used, and obtain their consent where necessary. Limit tracking to work hours and locations.
What should I do if an employee consistently fails to track their hours properly?
Provide additional training and support, set clear expectations, and apply your company’s policies for addressing non-compliance, which may include disciplinary actions.
How can I ensure accurate time tracking without micromanaging my employees?
Set clear expectations, use technology that employees find user-friendly, and provide training and support to ensure accurate time tracking without constant supervision.
