How to Track Employee Time: Methods, Tools & Best Practices

Whether you manage hourly workers, salaried staff, or a mix of both, knowing how to track employee time accurately can make a huge difference in your business. The right employee time-tracking system helps you avoid payroll mistakes, stay compliant, avoid employee burnout, and build trust with your team.

This guide walks through the most common ways to track time, best practices for accuracy, and how modern tools make the process easier.

TL;DR: How to track employee time

If you’re short on time, here’s the quick version on how to track employee time:

• The most reliable way to track employee time is by using time tracking software that lets employees clock in and out digitally.
• Some apps to consider: QuickBooks Time, Connecteam, Toggl Track, Homebase, Clockify, TrackingTime, My Hours, Buddy Punch, Timeero, ClockShark, and OnTheClock.
• Very small teams can start with paper timesheets or spreadsheets, but these methods are more error-prone and harder to manage as your team grows.
• Accurate time tracking requires clear expectations, a single clock-in method, consistent break tracking, and manager approvals before payroll.
• If you use rounding (like the 7-minute rule), it must be neutral over time and cannot consistently reduce employee pay.
• To track PTO, use a system that automatically accrues time, shows real-time balances, and keeps requests and approvals in one place.
• Choose your time tracking method based on team size and work style: 
  
  • Small teams → spreadsheet or free timesheet software.
  • Growing teams → online time tracking software;
  • Multi-location or shift-based teams → mobile time tracking app.

{{banner-cta}}

How to track employee time: 5 proven methods

Most teams start with whatever is easiest, and then upgrade when manual work and mistakes pile up. 

Here are the most common employee time tracking methods, from simplest to most reliable.

1. Paper timesheets (simple but error-prone)

Paper timesheets are exactly what they sound like: Employees write down their start and end times by hand.

Pros

• No setup required and free.

Cons

• Easy to lose or damage.
• Prone to math errors.
• Time theft is hard to detect.
• Manual data entry for payroll.

2. Excel spreadsheets or Google Sheets

Many managers start with spreadsheets as an employee hours tracker—they’re easier to manage than paper.

Pros

• Familiar and flexible.
• Easy to customize.
• Useful for learning how to track employee vacation time in Excel.
• Time tracking templates can automate some calculations for you.

Cons

• Manual calculations increase errors.
• No real-time tracking.
• Difficult to audit.
• Not ideal for compliance.

3. Punch clocks or physical time clocks

Punch clocks or swipe cards are more scalable and reliable than manual tracking or spreadsheets for teams that are always at the same location.

Pros

• Automated tracking.
• Simple for on-site teams.
• Reduces forgotten clock-ins.

Cons

• Limited reporting.
• Hardware costs.
• No remote access.
• Hard to track breaks and PTO.

4. Online timesheet software and digital time trackers

Online timesheet software replaces manual tracking and punch clocks with cloud-based tools that are both reliable and easy for employees to use.

Pros

• Automatic calculations.
• Accessible anywhere.
• Easier payroll exports.
• Stronger audit trails for breaks and PTO.

Cons

• Requires setup and training.
• Can be costly depending on your team size.

5. Mobile employee time tracking apps

Mobile time tracking apps take online timesheets a step further by letting your team clock in from anywhere on any device. 

Pros

• Fast, simple, and accurate.
• Reduces buddy punching.
• Tracks breaks automatically.
• Notifications for shifts and breaks.

Cons

• Requires setup and training.
• Requires employee buy-in.
• Can be costly depending on your team size.

What is the best way to track employee time?

Most teams find that time tracking software is the most reliable and effective way to track employee time.

Time tracking  apps automate what used to take hours:

• Automatic timesheets.
• Overtime calculations.
• Break tracking.
• PTO accruals.
• Payroll exports.

They also reduce common issues like missed punches, buddy punching, rounding errors, fraud, and compliance gaps. That’s why online time tracking is now considered best practice.

How to record employee hours accurately

Time tracking tools are helpful, but accuracy also comes from consistent habits. These time tracking best practices make any employee hours tracker more reliable.

Set clear time-tracking expectations

Setting clear rules upfront about when and how to clock in and out prevents confusion before it becomes a Friday afternoon cleanup job.

Tips:

• Define when employees should clock in and out.
• Clarify rules for early clock-ins or late clock-outs.
• Explain how to track breaks and swap shifts.

Use standardized clock-in/out methods

If employee hours are coming in from texts, sticky notes, and screenshots, payroll will always feel messy. Using a standardized method so you have a single source of truth.

Tips:

• Choose one system for clocking in and out.
• Make it accessible on phones, tablets, or a shared device.
• Avoid mixing manual and digital tracking (like texts, notes, and apps).

Track breaks and lunches to ensure compliance

Tracking breaks consistently protects both you and your team from compliance issues and pay disputes.

Tips:

• Require clock-outs for meals and long breaks.
• Use automatic reminders for breaks where possible.
• Keep records organized for easier review.

Use approvals to reduce payroll errors

Catching mistakes before payroll runs is much easier than fixing them after checks go out. A quick approval step helps you spot missing punches or unusual hours early.

Tips:

• Review timesheets at the end of each pay period.
• Flag missing clock-ins or unusually long shifts.
• Confirm changes before payroll is processed.

Audit timesheets regularly

Regular audits help you catch recurring issues early, before they turn into bigger problems.

Tips:

• Look for repeated edits or overrides.
• Watch for frequent early clock-ins or missed breaks.
• Address issues with guidance on the correct behaviour.

Understanding the 7-minute rule for clocking in and out

If you’ve ever wondered how rounding works—or whether it’s allowed at all—you’re not alone.

Under the Fair Labor Standards Act (FLSA): 

• Employers are allowed to round employee clock-in and clock-out times.
• You can round to the nearest increment (such as five minutes, one-tenth of an hour, or quarter hour).
• You must ensure the rounding is fair and doesn’t short employees on pay over time.

How the rule works

When rounding to quarter-hour increments:

• Clock-ins 1–7 minutes after the quarter hour are rounded down.
• Clock-ins 8–14 minutes after the quarter hour are rounded up.

Examples

• 8:07 a.m. → 8:00 a.m.
• 8:08 a.m. → 8:15 a.m.

What’s important to know

• Rounding must average out neutrally over time, meaning employees are fully compensated for the time they actually work.
• You cannot use rounding in a way that consistently benefits the employer.
• Rounding practices that regularly reduce paid time can create compliance risk.

Using a time tracking system that applies rounding rules consistently and transparently helps ensure accuracy and protects both you and your employees.

How to keep track of employee time off and vacation

Accurately tracking hours worked is only part of the picture. PTO is also a factor and isn’t always easy to track without a good system and policy.

Create a clear PTO policy

A clear PTO policy sets expectations early, so time-off requests don’t turn into coverage gaps at the last minute.

Tips:

• Define how PTO is earned.
• Clarify carryover rules.
• Set expectations for request timing and approvals.

Use a system that automatically accrues time

Manually updating PTO balances after a long week is easy to forget and hard to double-check. Automatic accrual keeps balances accurate without extra work for you.

Benefits:

• Accrue time consistently each pay period.
• Reduce math errors.
• Build trust by showing up-to-date balances.

Track requests, approvals, and balances in one place

Time-off issues often come up when requests live in emails, texts, and memory. A single system gives you visibility into who’s out and when before schedules are finalized.

Benefits:

• Centralize PTO requests.
• Easier to respond to time off requests quickly.
• See upcoming absences alongside schedules.

• Fewer scheduling surprises and see coverage gaps early.

Excel example and when to move beyond spreadsheets

If you’re managing a small team, Excel or Google Sheets can work as a basic way to track employee vacation time.

A simple PTO spreadsheet might include:

• Employee name
• PTO balance at the start of the period
• Time accrued each pay period
• Time used (with dates)
• Remaining balance
• Approval status or notes

This setup can work when requests are infrequent and one person owns all updates. But as your team grows, spreadsheet tracking becomes confusing and risky.

It’s probably time to move beyond spreadsheets when:

• PTO requests overlap with busy weeks or key shifts.
• Balances have to be updated manually after every pay period.
• Schedules are built without seeing approved time off.
• Multiple managers need access or approval visibility.
• Errors show up during payroll or time-off disputes.

At that point, a system that automatically tracks accruals, approvals, and balances in one place, like Homebase PTO tracking, can save time and prevent mistakes.

{{banner-cta}}

Best employee time tracking apps and software

Once you’ve felt the pain of missing hours or last-minute schedule changes, the next question is usually, “Which tools actually help?”

Below are the most common types of employee time tracking software, when they make sense to use, and software suggestions.

Mobile time tracking apps

Mobile apps make it easy for employees to clock in and out from anywhere on their phones, and reduce forgotten punches, too.

Mobile time tracking software:

• QuickBooks Time: Timesheet software with GPS tracking and a  real-time “Who’s Working” map, but it’s on the expensive side.
• Connecteam: Timesheet tracker with GPS time clock, geofencing, and digital reports and checklists.
• Toggl Track: Intuitive time tracker, best for project-based businesses.
• Homebase: Designed for hourly teams and includes team messaging and scheduling.

Free time tracking apps and free online timesheets

Free tools can be a helpful starting point when you’re testing digital tracking or managing a very small team. But it often has limited reporting, automation, and compliance tools.

Free online time trackers:

• Clockify: Generous free timesheet software; great for freelancers or agencies who also need project tracking.
• TrackingTime: Free time tracking app that’s good for basic logging and simple reports.
• My Hours: Free for up to 5 users and helps with billing for projects.
• Homebase: Free online time tracker app with scheduling and POS integration.

Narrowing down your list? Compare Homebase vs. Clockify in more detail.

Employee scheduling + time tracking tools combined

When scheduling and time tracking talk to each other, scheduled shifts turn into actual hours worked, you’ll make fewer manual adjustments, and you’ll have better visibility into labor costs.

Tools with employee scheduling + time tracking:

• QuickBooks Time
• Connecteam
• Buddy Punch
• Homebase

GPS and geofencing time trackers (for field teams)

For teams that don’t work in one place, location-based tracking helps verify clock-ins at the correct location without constant check-ins.

GPS and geofencing timesheet trackers:

• QuickBooks Time: Supports GPS time tracking for field or remote teams.
• Connecteam: Includes a GPS time clock and geofencing.
• Timeero: Offers live GPS tracking and mileage alongside time tracking.
• ClockShark: Built for field services and construction teams, with GPS-enabled time tracking.

Kiosk mode and tablet-based time clocks

When everyone clocks in at the same location, a shared device can be a simple and secure way to track time.

Work hours trackers with kiosk mode:

• QuickBooks Time (Kiosk mode): Can turn a tablet into a shared punch clock.
• Connecteam: Use personalized pin codes to clock in from a shared device.
• OnTheClock: Web-based attendance system and time clock system. 

Time tracking program and software features to look for

When you’re comparing tools, features matter more than brand names. The right features save time during payroll and prevent problems before they start.

Automatic timesheets

Manually adding hours is where small errors turn into big payroll headaches. Automatic timesheets remove that step entirely.

Benefits:

• Hours are calculated automatically when your team clocks in and out.
• Fewer math mistakes because no missed punches or adding hours by hand.
• Faster payroll prep when your time tracking data is already good to go, and payroll is even faster if your time tracker syncs with payroll.

Break tracking and compliance tools

Break issues are often discovered after the fact, when they’re harder to fix. Built-in compliance tools help you stay ahead of them.

Benefits:

• Tracks required breaks (like lunches and legally mandated breaks), so you can ensure your team isn’t overworking.
• Sends reminders to your team to take breaks or log hours.
• You’ll have organized records for audits or disputes.

Overtime alerts

You don’t want overtime surprises at the payroll stage after you realize you’ve gone over your labor budget. Alerts help you catch them earlier.

Benefits:

• Real-time notifications so you can see potential overtime as it’s happening.
• Better labor cost control because you can adjust upcoming schedules as needed, depending on the predicted cost.
• With real-time data, you can catch issues and fix them before payroll.

Time-off tracking + PTO accruals

Time-off tracking works best when it’s connected to schedules and hours worked. This makes it easier on you (less math!) and on your team (real-time, reliable PTO tracking).

Benefits:

• Vacation and sick time accrue automatically.
• You and your team can see clear balances for time-off, and always be on the same page about time-off allowances.
• See approved time-off while building upcoming schedules, so you’ll have fewer scheduling conflicts.

Payroll integrations

When time tracking is connected to your payroll, you don’t have to worry about manual data entry or inaccurate reporting.

Benefits:

• Data syncs directly from your time tracking to payroll.
• With automated data sync, you reduce the chance of duplicate entries.
• Lower risk of payroll errors from manual data entry.

Audit logs and fraud prevention tools

When questions come up from your team or the government, audit trails give you answers.

Benefits:

• Track edits and approvals to clock-ins and outs, breaks, and time-off requests so there’s a full record of who made changes and when.
• Buddy punching is easier to prevent with unique logins, biometric scans, or other tools for verifying clock-ins.
• Improve accountability across the team with transparent time tracking records and visibility on edits and approvals.

How to choose the right employee time tracking method

You’ve read about different time tracking methods, best practices, tools, and features, but if you’re unsure where to start, use your team size as a guide.

• Small teams can start with spreadsheets or a free time tracking app. They’re typically free and have a simple setup. 
• Growing teams usually benefit from time tracking software that automates the time-consuming parts of time tracking and scales with them.
• Multi-location teams need an employee time tracker app with geofencing that includes easy clock-ins from any work location.
• Field or service teams will be served best by a mobile work hours tracker, so clocking in is always accessible for the team.

The right time tracking program should match how and where your team works, so they don’t have to change their whole routine to accommodate the tool.

Make time tracking easier before it becomes urgent

Most people start thinking seriously about time tracking when something goes wrong—missed hours, payroll disputes, or compliance stress. 

But with the right system in place, those issues become rare instead of routine, or you can prevent them as much as possible.

Homebase makes it easy to track hours, manage PTO, and prepare payroll, all in one app. If you’re ready to simplify employee time tracking and spend less time fixing mistakes, then reclaim your time today with our free time clock.

{{banner-cta}}

FAQs about tracking employee time

What is the best way to track employee time?

The best way to track employee time is by using an employee time tracking software that automatically records hours, tracks breaks, and prepares timesheets for payroll. This is the most accurate and efficient option.

How to record employee hours?

You record employee hours by having employees clock in and out using a standardized system, reviewing timesheets for accuracy, and approving hours before payroll runs.

What app records employee hours?

An app that records employee hours is a time tracker app (free or paid) that lets employees clock in digitally and stores hours in one centralized system.