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Payroll Experts Explain the Benefits of Rounding Employee Hours January 26, 2017

La Crosse, La Crosse County
Payroll Experts Explain the Benefits of Rounding Employee Hours, La Crosse, Wisconsin

Along with an experienced payroll professional and cutting-edge software, advanced time clocks make accurately recording employees' hours easier than ever. These devices, along with some sophisticated accounting practices, help avoid calculation errors and ensure employees are paid fairly. But the law does allow other measures to lighten the burden of accurate payroll accounting. In many industries, rounding an employee's hours in small increments simplifies record-keeping and reduces the risk of errors, as long as the practice is implemented carefully.

payrollFederal labor laws allow employers to round their employees' hours as long as the average, over time, results in workers being fairly compensated. For example, a business owner who consistently rounds their employees' hours to their advantage could eventually face a lawsuit, often with very costly results. In some jurisdictions, employers are also prohibited from rounding on lunch breaks and scheduled rest periods, so consult with a payroll specialist before determining how your software should be programmed.

In many industries, employers are allowed a considerable degree of latitude in determining how hours are rounded, from anywhere between five minutes to the nearest quarter-hour. Even though the accounting practices may be fully automated, rounding to a more human-friendly quantity allows the data to be used for additional calculations, some of which might be done manually, and imported more easily into other programs. Round figures may also make it easier for your employees to verify they were fully compensated for all hours worked. That alone makes rounding worthwhile.


Before programming your time clock, consult with an experienced payroll specialist to ensure compliance with all state and federal labor laws. RKB Accounting & Tax Service in La Crosse, WI, offers a broad range of services, from bookkeeping to tax preparation, to assist you financially. For free accounting and tax resources, visit their website, follow them on Facebook, or schedule a consultation by calling (608) 782-6433.

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