How to Track Employees Hours: 3 Dynamic Ways + Best Practices

Employees looking at computer screen, creating employee schedule on Shiftbase scheduling tool

Welcome to your go-to guide on how to track employee hours—a subject that might sound straightforward but holds immense significance in today's fast-paced business world.

Let's cut to the chase: Proper time tracking is a cornerstone of effective payroll management. Get it wrong, and you risk not just payroll errors but also stumbling into compliance issues.

Must Reads:

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It's also the key to unlocking valuable insights into employee productivity and, believe it or not, boosting team morale.

Choosing the right method for your organization can be a bit like navigating a maze. You've got traditional timesheets, modern software, and even GPS-based systems to consider. Each comes with its own set of benefits and drawbacks, making the choice far from simple. 

So, what's in it for you in this guide? We'll explore various methods to accurately record work hours, highlight best practices, and even introduce you to tools like Shiftbase that can make your life a lot easier. Let's dive in to ensure your organization benefits from a meticulous approach that pays off in spades—financially and in employee trust.

Why Tracking Employee Hours Matters

You might think it's just about ensuring everyone gets paid the right amount, but it's actually a lot more nuanced than that. Let's break it down:

Payroll Accuracy

First up, accurate payroll. This one's a no-brainer, but you'd be surprised how many businesses mess this up. If you're not tracking hours correctly, you risk overpaying or underpaying employees. This can lead to financial inconsistencies, disgruntled workers, and even legal action.

Regulatory Compliance

This brings us to our second point: compliance. Laws like the Fair Labour Standards Act (FLSA) require businesses to maintain accurate records of hours worked, wages paid, and other conditions of employment. Non-compliance isn't just risky; it can result in hefty fines or lawsuits. So, tracking employee hours is not just a best practice—it's a legal necessity.

Productivity Analysis

Next, let's talk about productivity. Proper tracking can offer you a treasure trove of data. With tools like Shiftbase, you can get real-time insights into how time is spent within your organization. You can identify bottlenecks, find areas of inefficiency, and optimize workflows. This kind of data-driven decision-making can be a game-changer for your business.

Employee Satisfaction and Trust

Accurate time tracking assures employees that their hard work is recognized and rewarded appropriately. It fosters a culture of transparency and accountability, which can go a long way in building trust within your team.

Traditional Methods of Time Tracking

group of Human shaped wooden block with blue clock in front representing employee time tracking

Before we delve into high-tech solutions, let's talk about the age-old method of manual time tracking. It's been around for ages and is the foundation for most time-tracking systems today.

Manual Time Tracking


  • Simple: No need for any tech savviness; a pencil and paper will do.
  • Low Cost: No initial investment in software or hardware.
  • Flexible: Can be adapted for different types of jobs and tasks.


  • Time-Consuming: Requires manual entry and calculations.
  • Error-Prone: Human errors in recording or calculating can lead to mistakes.
  • Lacks Insights: Can't offer analytics or real-time data on productivity or performance.

Best for Specific Types of Businesses

Manual tracking isn't for everyone, but it can be a good fit for certain businesses.

  • Small Teams: If you're running a small business with a tight-knit team, the simplicity of manual tracking might be all you need.
  • Low Budget: For start-ups or businesses that need to watch every penny, avoiding the cost of a digital system can be advantageous.
  • Non-Tech Industries: Think about industries like construction or certain types of freelance work, where the tech curve is not as steep.


Manual Timesheets

Utilizing Spreadsheets: After you've tried pencil and paper, the next logical step is to hop on to spreadsheets. They're like the upgraded version of manual time tracking, offering a bit more flexibility and automation.


  • Easy to Use: If you can use Excel or Google Sheets, you're good to go.
  • Automation: Formulas can handle basic calculations like total hours worked, so no need for manual math.
  • Shareable: Easier to distribute among a team compared to paper sheets.


  • Still Time-Consuming: While faster than paper, entering data is still manual.
  • Limited Functionality: Spreadsheets can't track real-time data or integrate with other business software.
  • Error Susceptibility: The risk of human error still exists, especially when you're setting up formulas.

Manual timesheets on spreadsheets are a step up from pencil and paper, but are still a far cry from specialized time-tracking software. They offer a middle-ground solution that's better adapted for slightly larger teams or projects that require a bit more data manipulation. Keep in mind, as your business scales or compliance requirements become stricter, you'll likely find yourself needing a more advanced, specialized system.


3 Modern Methods of Time Tracking

Employee working on Shiftbase planning tool, creating employee schedule

With today's advanced technology, it's no surprise that time tracking has evolved, offering solutions that go way beyond the traditional pen and paper. Here, we delve into three modern methods that have their own unique advantages and limitations.

1. Time Tracking Software

In the cloud or on-premise, time-tracking software is an all-encompassing solution. You get features like real-time tracking, automated payroll, and even productivity analysis. The benefits are substantial, but it can be an overkill for smaller businesses or those with simpler needs. Some might also find the monthly or annual subscription fees burdensome.

2. Time Clocks

Remember those punch cards? They're smarter. Nowadays, time clocks can recognize biometrics like fingerprints or even your face. Card swiping is still around too. They're particularly useful for businesses where workers don't have easy access to computers or smartphones. The downside? Initial setup can be expensive, and these systems usually require some space. If they break down, you're back to manual tracking.

3. GPS Clock-Ins

For businesses with field workers—like construction, delivery, or sales—the GPS clock-in system is a game-changer. These apps can automatically log hours as soon as a worker enters or leaves a job site. Super useful for making sure people are where they say they are. But, there's a delicate balance to maintain with worker privacy, and GPS can be a drain on device batteries.

Each of these modern methods offers significant advantages in terms of automation, accuracy, and data analytics. But like anything in life, they come with their own set of challenges. Depending on your unique business needs, one may be a better fit than the others. Choose wisely.

Easily manage your employees' hours worked!
Easily manage your employees' hours worked!
  • Easily clock in and out
  • Automatic calculation of surcharges
  • Link with payroll administration
Try for free Request a demo

3 Best Practices for Time Tracking

When it comes to tracking employee hours, simply implementing a system isn't enough. To really make it effective, you need to follow some best practices. Here's the lowdown on how to make your time-tracking system a resounding success.

1. Transparency and Communication with Employees

First and foremost, be transparent with your employees about why you're tracking time and how it benefits both parties. No one likes feeling like they're under a microscope. Open communication sets the stage for mutual understanding and cooperation. Regular team meetings or one-on-one conversations about the time-tracking process can eliminate any misconceptions and build trust.

Useful Read: Transform Catch-Up Meetings By Asking These Unconventional Questions

2. Regular Audits to Ensure Accuracy

The system is only as good as its most recent audit. Consistently reviewing the data ensures that your tracking is both accurate and fair. Mistakes can happen—manual entries get botched, and automated systems can glitch. Regular audits help catch these errors before they escalate into larger issues like payroll mistakes or compliance violations.

3. Leveraging Analytics for Productivity Improvement

The beauty of modern time-tracking systems is the rich data they provide. Beyond mere clock-in and clock-out times, analytics can reveal patterns in productivity, idle time, and even workforce engagement. The key here is to collect this data and actively use it to implement changes. Are your employees more productive during certain hours? Use that insight to optimize work schedules. Is idle time becoming a concern? Perhaps it's time to reassess the workload or look for process improvements.

Shiftbase: The Ultimate Time-Tracking Tool

With so many options out there for tracking employee hours, making a choice can be overwhelming. That's where Shiftbase comes into play, cutting through the noise as an ultimate time-tracking tool. What sets it apart? Let's break it down.

How It Stands Out

First off, let's talk about the user-friendly interface. Navigating through various functions is a breeze, so you don't need to be a tech guru to get things done. It lowers the learning curve, allowing teams to adapt quickly. The 14-day free trial is another perk. You get hands-on experience before diving into a long-term commitment, which is always a win-win situation.

Security is another point where Shiftbase shines. Data security is a big deal, and you can rest easy knowing your sensitive data is well-protected. 

Features that Make It Unique

Manager working on Shiftbase scheduling tool to create employee schedules

  • Employee Scheduling: Say goodbye to scheduling headaches. With a simple drag-and-drop interface, employee scheduling has never been this easy.

  • Time Tracking: It offers real-time tracking and integrates seamlessly with your payroll system, eliminating any errors or discrepancies.

  • Absence Management: Keep track of leaves, vacations, or unexpected absences, all from a single dashboard.

  • Additional Features: One of the standout aspects is automatic surcharge calculation. It saves you the time and hassle of doing complex calculations manually.

Integration Capabilities

It's not just a standalone tool; it plays well with others. Shiftbase offers integration capabilities with popular payroll and HR systems, making it a versatile choice for diverse business needs.

All things considered, Shiftbase is more than just a time-tracking tool; it's an all-in-one workforce management solution. Whether you're grappling with scheduling, timekeeping, or absence management, Shiftbase provides a streamlined, secure, and efficient approach, making it a go-to choice for businesses aiming for optimal productivity.

Employee scheduling and Time-tracking software!
Employee scheduling and Time-tracking software!
  • Easy Employee scheduling
  • Clear time-tracking
  • Simple absence management
Try for free Request a demo


One thing is abundantly clear: tracking employee hours isn't just a managerial task, it's a business imperative. Accurate time tracking ensures payroll precision, safeguards against legal issues, boosts productivity, and most importantly, cultivates trust and satisfaction among your team members.

And here's where Shiftbase shines as the comprehensive, user-friendly tool designed to simplify this intricate chore. With its 14-day free trial, there's absolutely no risk to experience how its unique features—like automatic surcharge calculation and absence management—can add value to your business. Shiftbase offers peace of mind, proving its commitment to user satisfaction and data security.

So, what are you waiting for? Tracking employee hours is vital, and doing it right is even more crucial. Give Shiftbase's 14-day free trial a spin today. It might just be the solution to many of your time-tracking challenges, wrapping all your needs into one neat, efficient package. Let's make those hours count!

Topic: Time-tracking / How to Track Employee Hours