How to Calculate Work Hours (2025): Guide for US Employers
Note: This guide focuses on United States federal and state labor laws as of 2025. If you’re located outside the US, please consult your local labor regulations.
Need to calculate hours quickly? Choose your method:
- Work hours calculator: Use an online work hours calculator like EARLY to streamline calculations, track overtime and breaks, and ensure accuracy for payroll and compliance. Start your free 30-day trial
- Excel users: Download ready-made timesheet templates with built-in formulas (requires manual entry)
- One-time calculations: Use our free Time Card Calculator for instant results (still manual, but fast)
As an employer or HR professional, you need to know how to calculate hours worked per day, week, or month while staying compliant with US labor laws.
This guide explains the step-by-step formula for calculating work hours, covers 2025 legal requirements in the United States, provides Excel calculation instructions, and addresses common mistakes to avoid.
Legal context: Why accurate calculations matter
Before diving into the calculation formula, here’s essential context: Under the Fair Labor Standards Act (FLSA), US employers must accurately calculate and record hours for non-exempt employees (those entitled to overtime pay).
Compliance with wage and hour laws and other hour laws is crucial, as these regulations govern employee working hours, overtime, and record-keeping requirements.
Key requirements to comply with wage and hour laws:
- Track hours worked each day and week
- Calculate overtime at 1.5x regular rate for hours over 40/week (federal standard)
- Maintain accurate records of all employee working hours for 2-3 years
State variations: Some states have stricter rules. California requires overtime after 8 hours/day and double-time after 12 hours/day. Alaska has similar daily overtime requirements. If you have employees in these states, you’ll need to apply their specific rules.
How to calculate hours worked (the manual way)
Step 1: Determine the start time and end time
To calculate how many hours an employee worked, identify the start time (when the employee begins work) and end time (when the employee finishes work) for each work day. This information typically comes from timesheets, time clocks, or time tracking software that records when employees clock-in and clock-out.
Example: On Monday, John Watson started working at 8:00 AM and finished at 5:15 PM.
Step 2: Convert time to military time
Convert start and end times to military time (24-hour clock format, where hours run from 00:00 to 23:59) to avoid AM/PM confusion.
When converting times to 24-hour or military time, morning hours (AM) are recorded as-is (e.g., 8:00 AM remains 08:00), while afternoon hours (PM) are converted by adding 12 to the hour (e.g., 5:15 PM becomes 17:15).
Example: 8:00 AM = 08:00, and 5:15 PM = 17:15
Quick reference:
- 1:00 PM = 13:00
- 2:00 PM = 14:00
- 3:00 PM = 15:00
- 4:00 PM = 16:00
- 5:00 PM = 17:00
For faster calculations use the free military time converter.
Step 3: Convert minutes to decimal form
This process involves converting traditional time formats into decimal hours or decimal time by dividing the minutes by 60, making wage computation and record-keeping more accurate and efficient.
Example: If an employee works 1 hour and 15 minutes, divide 15 by 60 to get 0.25. So, 1 hour and 15 minutes becomes a decimal value of 1.25 hours. Similarly, 17:15 becomes 17.25.
Common conversions:
- 15 minutes = 0.25 hours
- 30 minutes = 0.50 hours
- 45 minutes = 0.75 hours
For faster calculations use the free minutes to hours converter.
Step 4: Subtract start time from end time
Subtract the start time from the end time to get the total number of hours worked.
Example: 17.25 – 08.00 = 9.25 hours
Step 5: Subtract unpaid breaks
Unpaid breaks (meal periods where employees are completely relieved of work duties) must be deducted from total hours to calculate net work hours (actual compensable time).
Example: 9.25 hours – 0.5 hours (30-minute lunch) = 8.75 hours worked
Important break rules under FLSA:
- Short breaks (5-20 minutes): Must be counted as paid work time
- Meal breaks (30+ minutes): Can be unpaid only if employee is completely relieved of duties
Step 6: Calculate total hours for the pay period
For consistent schedules: Multiply daily hours by workdays.
- Example: 8.75 hours/day × 5 days = 43.75 hours/week
For variable schedules: Calculate each day individually, then sum the totals to get the total number of hours worked in the pay period. The free work hours calculator will help you all the way. You can also determine the average hours per week, which is useful for reporting or compliance purposes. Remember to account for holidays, vacation days, and time off.
FOR EMPLOYERS: Under US law, only actual hours physically worked count toward overtime thresholds. Paid time off (vacation, sick days, holidays) does NOT count toward the 40-hour overtime threshold. For example, if an employee takes Monday off (8 hours PTO) and works Tuesday-Friday (40 hours), they have 40 worked hours, not 48, so no overtime is owed under FLSA.
Step 7: Calculate overtime (if applicable)
Federal overtime (most states): Hours over 40 in a workweek at 1.5x regular rate
Overtime calculation example:
- John works 45 hours in a week
- Regular rate: $20/hour
- Regular pay: 40 hours × $20 = $800
- Overtime rate: $20 × 1.5 = $30/hour
- Overtime pay: 5 hours × $30 = $150
- Total weekly pay: $950 (including all overtime worked)
To speed up overtime calculation, check out the free overtime calculator.
How to calculate hours in an automated way
Option 1: Fully automatic calculation (Recommended for teams)
Time-tracking software automates the process of tracking and calculating the time spent at work, on different tasks, projects, or clients. There is no more need for paper timesheets, and all employee timecards are always at hand, available within one software.
Who is it best for? Any business with multiple employees, remote teams or anyone processing payroll more than once per month.
Which time tracking tool to choose? A time clock system like EARLY automatically records when employees start and stop work, calculates total hours each employee worked, deducts breaks, and computes overtime.
Benefits:
- Zero manual calculation needed
- Eliminates arithmetic errors
- Real-time visibility into hours worked
- Instant reports for payroll processing
- Digital time cards are generated automatically for each employee worked period
The process:
- Employees clock in with a digital time clock when they start work (via mobile app, desktop app or web app, physical tracker device)
- The software automatically records the timestamp
- Employees clock out for breaks and at end of day
- The system automatically:
- Converts all times to decimal format for accurate calculation of employee worked hours
- Calculates total hours worked
- Deducts unpaid break time
- Calculats overtime hours
- Generates timesheets and digital time cards ready for payroll
Example: An employee clocks in at 8:07 AM and out at 5:18 PM with a 32-minute lunch break. EARLY automatically calculates 8.65 hours worked (accounting for time rounding and break deduction) and tracks the exact hours the employee worked for payroll and compliance, without you needing to do any math.
Automatically or manually. With a physical time tracker or keyboard shortcuts. Under 1 minute a day.
Option 2: Calculate work hours in Excel
Are you a spreadsheet fan and want to use Excel or Google Sheets as your hours calculator? Why not! Excel can automate hour calculations for small to medium teams. It’s neither scalable or fully automated but it’s for free.
Quick start option: Skip manual setup and download our free timesheet templates with pre-built formulas, or use the Time card calculator for instant results without any spreadsheet work:
Benefits:
- Flexible and customizable
- They can be used to track multiple projects and tasks
- It’s possible to generate reports and invoices
- They can be shared with multiple users
- They can be used on desktop, mobile, and web
Drawbacks:
- They can be time-consuming to set up and maintain
- Prone to errors
- Not user-friendly, messy, and clunky
- Not as secure as dedicated time tracking systems
How to calculate work hours in Excel: Step-by-Step
Step 1: Create headers
- A1: “Employee Name”
- B1: “Date”
- C1: “Time In”
- D1: “Time Out”
- E1: “Break (minutes)”
- F1: “Total Hours”
Step 2: Format time columns
- Select columns C and D
- Right-click > Format Cells > Time
- Choose “1:30 PM” or “13:30” format
Step 3: Format hours column
- Select column F
- Right-click > Format Cells > Number
- Set Decimal places to 2
Step 4: Enter calculation formula
In cell F2, enter:
=(D2-C2)*24-(E2/60)
What this formula does:
- (D2-C2)*24 converts time difference to hours
- (E2/60) converts break minutes to hours
- The subtraction gives you net work hours
Step 5: Calculate weekly totals
In a cell below your data (e.g., F10) insert:
=SUM(F2:F9)When to use automated vs. manual calculations
Not sure which calculation method fits your business? Here’s a quick guide to help you choose based on your team size and payroll complexity.
Manual calculations work for:
- Very small businesses (1-5 employees)
- Consistent, simple schedules
- No overtime or rare overtime
- Single pay rate per employee
Automated solutions (software or Excel) needed when:
- More than 5 employees
- Variable schedules or shift work
- Frequent overtime
- Multiple pay rates
- Multiple locations or states
- Remote workers
- Complex break policies
Frequently Asked Questions
How do I define work hours and overtime in the United States?
Regular work hours are the standard timeframe during which an employee performs job-related duties. While typically 35-40 hours per week for full-time employees, the FLSA doesn’t define full-time—that’s determined by employer policy. Overtime under federal FLSA law occurs when a non-exempt employee works more than 40 hours in a workweek and must be paid at 1.5 times their regular rate.
What if my employee works in multiple states?
Apply the labor laws of the state where the employee physically performs the work. If an employee works in multiple states during one week, you may need to apply the most protective state’s laws or track hours by location. Consult an employment attorney for multi-state situations.
Do I need to track minutes or can I round?
You can round time to the nearest increment (5, 6, or 15 minutes) if your policy is neutral and doesn’t systematically favor you as the employer. The rounding must average out fairly for employees over time.
What’s the difference between hours worked and hours paid?
Hours worked refers to the actual time an employee spends performing job duties, which is what counts toward overtime calculations. Hours paid includes hours worked plus any paid time off such as vacation days, sick leave, or holidays.