PTO tracking

PTO, known as Paid Time Off, are hours paid to employees for not working. They are often, but not always, provided by a company as a benefit to their employees.

They are a perfect way for an employee to plan for a vacation, family gathering, special event, or just have a break. PTO can also cover sick days and paid holidays too.

But time off comes in limited supply.

For example, your company may offer a week (40 hours), two weeks (80 hours), or even more to each employee during the year.

Also keep in mind PTO hours are currency.

Employees want to know exactly how many hours are available now, and how many hours will be available in the near future, and is often referred to as a "bank" of hours. Employers also need to know exactly how many hours too, as it becomes an accounting liability to the business.

That's why PTO hours need to be tracked.

How to track PTO hours

Using our online time clock, all time off hours are entered on timesheets, just as work hours. You can easily enter them in the timesheet editor.

On the timesheet (or timecard if you prefer) we include columns for all hour types including Regular, Overtime, Double Time, PTO, Sick, and Holiday hours.

So there is no mistaking which are work hours, and which are time off hours.

PTO vs Vacation

Technically, PTO hours and vacation hours are the exact same thing, at least in regard to payroll. They are both categorized as paid time off.

Generally, vacation is a more specific type of PTO that can be separated from other types of time off, thus allowing you to track both vacation and sick time.

In comparison, PTO is a broader term that can include all paid time off types such as vacation, sick, personal, and sometimes holidays. It includes other types of PTO too such as bereavement, jury duty, military leave, maternity leave, and others.

Companies that use PTO instead of vacation often offer employees one bank of hours they can draw from. It could be used for vacation, a sick day, or anything they want, the reason really doesn't matter, as they are all days off.

Choosing one over the other is your choice. The advantage of PTO is employee flexibility, the advantage of vacation is having specific and separate rules for both vacation and sick time.

PTO Accruals

Some companies choose to give PTO hours as flat amounts at a specific date in the year, for example January 1st, or an anniversary date. If you do, employees will have their bank of hours available to use right away.

Some companies choose to give PTO gradually through the year instead, known as accrual. An employee's bank of hours can accumulate monthly (typically) at a specific rate. For example, if an employee receives two weeks vacation per year, the accrual rate is 80 ÷ 12, or 6.67 hours per month. So if an employee is starting off, they will have to work two months before 8 hours of time off is available.

Our system allows up to two accrual settings per employee. One for PTO/vacation, and one for sick time. They both give the option of accruing over time, or by how many hours an employee works.

If you use accruals, we recommend resetting your accrual start date each year. It helps make sure it is accurate, and helps schedule adjustments such as awarding more time off to long-term employees.

Carry over

Some companies have a policy of use-it or lose-it. Meaning if you don't use your bank of hours during the year, you forfeit those hours for the new year. Thus putting more incentive on employees to make sure they use those hours.

Some companies however, carry over unused PTO hours to the following year. With us, we include an accrual setting that allows you to enter a starting amount of hours at the beginning of the yearly term. Meaning any hours entered will automatically be available to the employee at the start of the new term.

Conclusion

PTO hours are a welcome benefit you can offer your employees.

We hope you do.

If so, we can track them for you.

Job tracking

Employers track employee hours primarily for payroll, but there can be other reasons.

Sometimes employers find it useful to track time for production activities, or billing activities. Examples might include...

• Time worked on specific tasks
• Time worked on a project
• Time worked for a client or customer
• Time worked at a location

To cover most possible activities, we refer to them as Jobs. Job tracking then, is an accounting method to count how many hours were spent on specific activities.

Not as a "job position" such as customer service rep, but as a task performed by someone on your team.

Not as "job costing" either (although related), but as a way to track infrequent changes from 1 to 4 times a day.

As an aside, "job costing" is an accounting method that records data points beyond labor, such as material costs, and overhead expenses. It is possible for us to report your labor hours, but we should not be considered a job costing system. We are primarily an online time clock system for payroll.

Can jobs be grouped by project?

Yes, you can create a list of projects, and assign various jobs to each project.

When an employee is set to track jobs, they will see a list of jobs to choose from as they clock in. Each job name will also include the project name

When to use job tracking?

As a rule, only when tracking jobs that take at least an hour or two.

For example, a design firm might need to track time spent on...

• Art direction
• Production
• Client meetings

On a single day, an art director might spend 1 hour in a client meeting, 4 hours designing, and 3 hours in art production. Maybe each for a different client.

As mentioned, each job could be assigned to a project. Meaning each project could be the name of a client, or specific project for a client.

Job tracking reports

Like hours tracking, job tracking is all about reports.

In your dashboard, we provide a job tracking report system that can be filtered by date range, project, job, and employee.

If you enter hourly rates for employees, the report will also calculate your cost. However we do not calculate billing rates.

GPS Tracking

Using a time clock system like ours, GPS tracking is a method to record the location an employee is working as they clock in.

Using GPS tracking is all about knowing "where" the employee was when they clocked. For example a workplace, worksite, line of travel, or customer location.

Our GPS tracking does not track the employee's movement, nor does it use geo fencing to prevent clocking, it only captures their location when they clock in or out.

The word "capture" means it records the employee's Latitude and Longitude coordinates when they punch. That way, you can easily find the location on a map.

How does it work?

Geolocation is a process that uses several techniques including triangulation to determine the most accurate location.

Smartphones are the most accurate because they include a GPS receiver to find location from GPS satellites.

Beyond that, location can also be determined by proximity to cell towers, and knowing IP address information.

Since most laptops and desktop computers do not have a GPS receiver, their resulting coordinates are not as accurate.

So as a rule, it may be best to only use GPS tracking for employees using smartphones to clock in/out.

When to use GPS tracking?

In our view, only when employees work remotely and clock from smartphones.

Examples can include delivery drivers, construction workers, maintenance workers, or anyone who works offsite.

Employees can also specify a job as the clock in.

When not to use GPS tracking?

When employees work at specific job locations such as an office, restaurant, store, hotel, factory, or school.

If so, you will already know their location based on the time clock, or the network IP address they used to clock in.

Further, you will avoid the intrusive nature of capturing geo coordinates.

Opt-in limitation

GPS tracking on phones is an opt-in service. Meaning employees need to "allow" our web app to capture their geolocation by tapping a button.

If they don't, they will not be able to clock in at all.

If that happens, please have employees go to their phone settings to reset their geolocation preferences.

Bottom line

Having employees clock from their phones is not always the best idea as some will have you believe. Unless the phone was supplied by the employer, a phone is a personal device that requires costs and maintenance outside of their employment.

However, if there are no other methods available, and if employees work remotely, then yes, phones make sense if employees agree to it.

If they do, GPS tracking will help.

Automatic holidays

Holiday hours are often provided as a benefit to employees.

For example, a company might give employees the day off for Thanksgiving yet still pay them 8 hours. Maybe the same for Black Friday too.

Which is a nice perk, or in this case, a four-day weekend.

For payroll, holiday hours are a distinct, separate paycode, much like PTO or sick time. Employees get paid for hours they don't actually work.

But to record these hours, employers need to manually enter them on each employee timesheet or timecard.

Which is fine when you only have a few employees, but tedious when you have many.

Automatic holidays

To make it easier, our online time clock software does the work for you.

It works by entering your paid holidays as a list in your account, including the holiday name and date.

Then setting the option for each employee, as some of your employees may be eligible, while others may not.

Finally, when the holiday arrives, the holiday hours appear on each eligible timesheet... Automatically.

You can still enter holiday hours manually if you want to, just like vacation hours.

But you don't have to.

What is overtime pay?

Overtime pay is a premium applied to hours worked "over" the standard 40 hours per week, or the standard 8 hours per day (depending on your state).

It only affects non-exempt employees (hourly workers).

By law, overtime must be paid at 1.5x the employee's regular rate.

Overtime pay example

A non-exempt employee works 44 hours, and their regular rate is $20/hour.

Regular pay = 40 hours x Hourly Rate

Regular pay = 40 x 20 = $800

Overtime pay = Overtime Hours x Hourly Rate x 1.5

Overtime pay = 4 x 20 x 1.5 = $120

Total pay = Regular pay + Overtime Pay + Supplemental Pay

Total pay = 800 + 120 + 0 = $920

What determines if an employee is non-exempt?

According to the Fair Labor Standards Act FLSA...

If an employee meets the following three criteria, they are exempt from overtime pay if:

• They earn at least $684 per week ($35,568 annually)
• They are paid on a salary basis, not hourly
• Their job is executive, administrative, professional, computer, or outside sales

So, if they do not meet ALL THREE, they are considered non-exempt and are eligible for overtime pay, so please be sure they get paid fairly.

Weekly overtime pay

Also according to the FLSA, all non-exempt employees are eligible for weekly overtime over 40 hours in a workweek.

A workweek is a fixed, recurring, 7-day period determined by the employer. For example 12 AM Monday through 11:59 PM Sunday.

Contact your time and attendance and payroll provider if you need to change that, otherwise keep it consistent.

Daily overtime pay

All US states must follow the federal law of 40 hours per week, however the following states also require daily overtime.

• Alaska: 1.5x the regular rate over 8 hours per day
• California: 1.5x the regular rate over 8 hours per day. Plus 2x the regular rate over 12 hours per day
• Colorado: 1.5x the regular rate over 12 hours per day

Industry exceptions

Some exceptions may override both federal and state models, for example some industries governed by collective bargaining agreements or state law.

One example includes the 8/80 rule.

This applies overtime pay after 8 hours in a day, or 80 hours in a 14-day period, and can be common for public safety, health care, or unionized industries.

Weighted overtime pay

This can occur when employees are eligible for overtime, however they work at different hourly rates.

If so, overtime is calculated as a weighted overage of their various rates.

What is bonus pay?

A bonus is a supplemental wage given to an employee above and beyond their "regular" pay, and typically as an award or gift.

Here I'll explain what kind of bonuses employees can receive, along with examples.

To start, understand bonuses come in two flavors...

• Discretionary ( Based on the employer's sole discretion )
• Non-Discretionary ( Based on the employer's agreements or expectations ).

Discretionary bonus

These bonuses are up to you as an employer. They are not included in the regular rate of pay for overtime calculation. Examples include...

• Spot bonus: As a reward for going above and beyond
• Holiday bonus: As a thank you at holiday time
• Employee-of-the-month bonus: As a special recognition

Non-discretionary bonus

These bonuses are based on performance, output, or an agreement between you and the employee. They must be included in the regular rate of pay for overtime calculation. Examples include...

• Production bonus: As a reward for meeting specific targets/goals/quotas
• Attendance bonus: As a reward for perfect attendance or safety standards
• Sign-on bonus: As an incentive for employment

And yes, a non-discretionary bonus can impact overtime calculations because they must be included in the regular rate of pay.

And according to the FLSA, overtime is 1.5 the regular rate of pay for any minute over 40 hours in a workweek.

This means if a non-discretionary bonus is earned during a workweek (where overtime is worked), the bonus must be factored into the regular rate of pay.

When calculated correctly, the employee will be compensated fairly for their overtime.

Non-discretionary bonus with overtime example...

An employee works 44 hours in a week at $20/hour and earns a $500 non-discretionary bonus.

Regular rate of pay = (Total weekly earnings, including bonus) ÷ Total hours worked.

$880 (regular pay) + $500 (bonus) = $1,380 total earnings.

$1,380 ÷ 44 hours = $31.36 regular rate of pay.

Overtime pay = Regular rate × 1.5 × Overtime hours.

$31.36 × 1.5 × 4 = $188.16 overtime pay.

The white label time clock

Having employees see your time clock vendor name as they clock in is fine, as most companies (who use us) have no issue.

But what if you prefer to promote your own brand?

Or what if you prefer not to share the details of your time clock provider? Especially details like pricing.

Your choices are either build your own solution and host it yourself... Or plug into a white label time clock.

This way you have your own domain name that displays your name and logo.

For us, we didn't offer a white label in the past, but do now. And yes, it works with our time clock hardware too.

Who could use this?

Anyone who's clients could use a time clock system. Such as...

• CPA firms
• Bookkeepers
• Payroll providers
• Staffing agencies
• Larger organizations
• Time and attendance resellers

If interested, please reach out. We'll be happy to provide details.

Working through midnight

Some employees work crazy hours at night, graveyard, or round the clock.

But it doesn't change how work hours are calculated.

No matter how crazy their schedule is, employees are compensated on how many hours they work in a day, and how many hours they work in a workweek.

Why? By law, that is how overtime is calculated.

So if an employee works through midnight, you have to draw a line in the sand that says when the workday starts. Then it can be calculated.

Our online time clock says an employee's workday starts when they clock in.

As an example, if an employee clocks in at 9 PM on Wednesday, and out at 5 AM on Thursday, they are compensated 8 hours for Wednesday.

To make this work, along with our Maximum shift setting, we also include a New Shift After setting.

New shift after

The default New Shift After is 3 hours.

This means that any IN punch that occurs at least 3 hours after the last OUT punch is considered a new shift.

Going back to our example...

If our employee clocks in at 9 PM on Wednesday, but clocked out at 1 AM on Thursday for a meal break, their next IN punch will keep them in the same shift as long as they clock IN within 3 hours.

But if instead they clocked back in at 5 AM, then the 5 AM punch is considered a new shift that starts on Thursday.

Bottom line, it's okay for employees to work crazy hours.

And if they do, hours will still be calculated correctly.

Timecards or timesheets

They are both the same thing.

The name timecard comes from paper card stock printed with days of the week, and used with traditional time clocks.

The name timesheet comes from sheets of paper also printed with days of the week, and filled out with pen or pencil.

Outside of that, each one does the same exact thing... They keep a record of time worked, maybe with start/stop times, maybe with hours only.

It has nothing to do with hourly vs salary, or job tracking either.

Since an online time clock doesn't use paper, we could try to rename it.

Should we call it a "Weekly Payroll Time Report for July 14 through July 20 2025 for Sam Smith including Start/Stop Times" as an example?

Hmm, timesheet might better. Timecard perhaps?

Whatever works for you.

The maximum shift

We think the easy way to clock in is by clicking one single button.

Not an IN, OUT, or BREAK button, just one botton... That handles it all.

This way, it avoids the mistakes of employees clicking the wrong button, and it avoids you having to fix them later.

To make this work, we use a computer algorithm (program) that knows in advance what the next punch should be.

For example, if an employee clocks in at 8:00 AM, it knows their next punch will be a clock OUT.

Then, if the employee is clocked OUT, it knows the next punch will be a clock IN. Simple, easy peasy.

But what if an employee forgets to clock out?

Maximum shift

A maximum shift is the maximum number of hours employees work during a shift. And has nothing to do with time clocks reading minds.

As a default, our system assumes nobody works longer than 14 hours during a shift... If your employees do, you can set this for 18 hours or longer.

This means if an employee clocks in at 8:00 AM but forgets to clock out, then a punch the next day at 8:00 AM will be considered an IN punch... As that punch is greater than 14 hours from the last punch.

In addition, the timecard will also show their OUT punch as red dashes. Meaning it was "missed", and letting you know it needs editing.

Overall, this will make life easier for you.

Now getting them to remember to clock out is another story.