How to Choose a Time Clock

If you pay hourly employees, you need a time clock.

Today, I'll explain what to look for and why.

Typically, choosing an employee time clock is a task for business owners, managers, accountants, bookkeepers, or payroll specialists... Whatever your role, I hope it helps.

This advice is for any small business, but also applies to any large business too.

In a related post, read about the 5 Questions when Choosing a Time Clock.

Why use a time clock?

Beyond recording employee hours, consider the following benefits:

Promote fairness. Using a time clock takes away any personal bias. Nobody is given special advantages or favors. Everyone is treated equally.

Keep employees honest. If an employee clocks in late, then they are late. An indisputable record is now etched on their timesheet to prove it.

Know if employees are working or not. Look at their timesheets. Are they clocked in? Some systems provide status reports that keep you informed.

Reduce administrative costs. This varies depending on what kind of time clock. But even a basic clock that prints on a time card is more efficient than writing on paper. Clocks that calculate hours will save hours of time.

Reduce payroll errors. With a completed timesheet, and assuming the approval of both the employee and supervisor, payroll can run safely. Further, some time clocks allow data transfer or full data integration to help eliminate mistakes.

Help with compliance. Here is a quote from the Fair Labor Standards Act (FLSA) guidelines: "The FLSA requires employers to keep records on wages, hours, and other items, as specified in DOL record keeping regulations."

Types of time clocks

There have been many varieties over the years. But to narrow it down, I'll focus on three broad categories:

• Time clock machines
• Offline time clocks
• Online time clocks

1. Time clock machines

The traditional time clock. Machines with a clock face and mechanism to print a timestamp onto a paper time card. They stand alone with no need for software or network connections.

Here are a few types...

Mechanical time clocks: Extinct as of 2025. These time clocks used a mechanical type wheel that hammered through an ink ribbon onto a time card. Making a loud, "ka chunk" sound. It's where the term "punch" clock came from.

Electronic time clocks: The next generation. Instead of a mechanical punch, electronic clocks print using a dot-matrix printer. Much quieter and lighter. Making them a better choice for offices, as well as manufacturing.

Side printing time clocks: These clocks have a slot on the side where time cards are inserted. You align the card manually on the correct line of their time card. You can also use them to print timestamps on office documents.

Top loading time clocks: Automatically feeds the time card from the top. Like bread in a toaster. Eliminating the print errors found on side printers. They can also print in two colors. Black for regular time, and red for exceptions such as clocking in late.

Calculating time clocks: Just like top loading clocks, but with the ability to calculate cumulative time on the time card. If you prefer using a time clock machine for payroll, this is the type to get.

Advantages

• No computer or software is required
• Most sit on a desktop, or mount to a wall
• Easy for employees to use
• Relatively low cost
• No monthly fees

Disadvantages

• Payroll hours must be manually entered by payroll staff
• Requires cleaning, ink, and card replacements
• Paper time cards get lost, or ruined. Time card racks can help.
• Malfunctioning machines need repair or replacement

Recommendation

Time clock machines are being used less in small business. However there are times where using one makes sense. For example smaller teams, limited network access, and lower operating budgets. The trade-off is more time spent processing payroll hours.

2. Offline time clocks

Offline time clocks are generally a combination of time clock hardware along with some method to manage punch data. Offline meaning they are neither web-based or require monthly subscriptions.

Here are a few types...

Software only: Although harder to find these days, there are companies offering installed software solutions allowing employees to clock from a PC or Mac, sometimes with a USB finger sensor.

Time clocks with PC software: These are a combination of time clock hardware along with Windows-based time clock software (but not Mac). Hardware can include PIN, RFID badge, fingerprint, or facial recognition time clocks.

Time clocks with no software: More recently, low cost biometric time clock hardware from China has been popular. They don't include software, but allow you to use USB drives to export punch data compatible with spreadsheets on your PC.

Advantages

• Automatically calculates total hours
• Reports payroll summaries
• Exports data to outside payroll software
• Allows the storage of historical data
• Reduces errors
• Reduces administrative costs
• No monthly fees

Disadvantages

• Does not support multiple locations without special networking
• Limited to Windows, little support Mac.
• Will not work with phones or tablets
• Support is only for a limited time
• Annual support agreements are an additional cost
• Requires you to maintain and backup data

Recommendation

If you really don't want to pay a monthly fee, have only one location, and are willing to spend more time managing payroll hours, offline time clocks may be a good choice. However if you prefer the convenience of web-based software, keep reading.

3. Online time clocks

In contrast to offline, online time clock systems are not located at your place of business, they operate from the provider's servers. That's why they require monthly fees towards maintenance, support, and future upgrades.

With online, you don't pay for software, you pay for usage, most often in the form of a plan. The model offers great advantages, you just need an Internet connection.

Here are a few types...

Free online time clocks: Some companies offer free plans to entice you to sign up, but with a catch. They ultimately want you to upgrade. Generally, free plans are limited, don't provide extended storage, and often don't calculate overtime or keep you compliant.

Online time clocks as a secondary service: These are companies that added online time clock systems as an afterthought. For example if you run payroll with a large provider, chances are they will try to upgrade you to their in-house time and attendance product.

Online time clocks as a primary service: These are companies created primarily as online time clock systems, some with optional time clock hardware, some without. Some also offer a better alternative to large payroll providers by including embedded payroll.

Advantages

• Access from any web browser
• Easy to network multiple locations
• Real-time data
• Free support, free maintenance, free backups
• Generally more secure than offline
• Reduces administrative costs
• Reduces errors

Disadvantages

• Requires an internet connection
• Requires monthly fees
• Distrust of the cloud

Recommendation

If you have multiple locations, there is no better alternative to an online time clock. Further, if you have a single location, the advantages and conveniences of an online time clock will ultimately increase your efficiency and lower your costs.

Conclusion

I've presented the advantages and disadvantages to every available category of time clock for payroll.

I hope it helps you choose the best one for your business.

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