Ask a room of small-business owners what part of payroll they dread most and timesheet math comes up fast. Not the paying — the adding. Start times, end times, unpaid lunches, a shift that crosses midnight, and suddenly a five-minute job turns into a spreadsheet full of crossed-out numbers. Getting hours and overtime right matters twice over: employees notice every mistake, and wage rules are not forgiving about sloppy totals. The good news is that the arithmetic itself is simple once you break it into steps.

Step 1: Turn clock times into worked time

For each shift, subtract the start time from the end time, then subtract any unpaid break. An employee who clocks in at 8:00 a.m., clocks out at 4:30 p.m., and takes a 30-minute unpaid lunch has worked 8 hours — not 8.5. The two places this goes wrong most often are breaks (paid breaks count as worked time; unpaid meal breaks do not) and shifts that run past midnight, where the end time belongs to the next calendar day. If you are adding a week of these by hand, this is where errors creep in, which is why many owners run the raw start and end times through a simple hours calculator first and only start thinking about pay once the worked time is solid.

Step 2: Split regular hours from overtime hours

Under the U.S. federal Fair Labor Standards Act, non-exempt employees earn overtime at one and a half times their regular rate for every hour worked beyond 40 in a single workweek. Two details trip people up:

  • It is weekly, not daily. Federally, four 11-hour days (44 hours) contain 4 overtime hours, while five 9-hour days followed by a short week may contain none. Some states add daily overtime or double-time rules on top, so check your state labor site before you finalize a policy.
  • The workweek is fixed. Pick a consistent 7-day window (for example, Monday 12:00 a.m. to Sunday 11:59 p.m.) and apply it the same way every week. You cannot average two weeks together to smooth out an overtime spike.

Step 3: Run a worked example

Say a retail employee earns $18.00 an hour and works Monday to Friday, 8 paid hours a day after lunch, then comes in for a 6-hour Saturday shift.

  • Total hours: 40 + 6 = 46
  • Regular pay: 40 × $18.00 = $720.00
  • Overtime hours: 6, at $18.00 × 1.5 = $27.00 → 6 × $27.00 = $162.00
  • Gross pay for the week: $882.00

Before you issue checks, it is worth cross-checking your figures against an overtime pay calculator — enter the hourly rate, regular hours, and overtime hours, and confirm the total matches yours. A two-minute check is a lot cheaper than correcting a payroll run.

Habits that keep payroll boring (in a good way)

  • Round consistently. If you round clock times to the nearest 5, 10, or 15 minutes, apply the same rule at clock-in and clock-out, for everyone.
  • Keep the raw times. Store start, end, and break times — not just totals — so any week can be rebuilt if an employee questions it.
  • Review before payday, not after. A quick scan for impossible weeks (nobody worked 31 hours in one day) catches most keying errors while they are still free to fix.
  • Write your policy down. Who approves overtime, how breaks are handled, and when the workweek starts should be on paper, not in your head.

None of this requires accounting software or a payroll department. It requires a consistent routine: convert times to worked hours carefully, split at the 40-hour line, apply the rate and a half, and double-check the result. Do that every week and payroll becomes the dullest part of running your business — which is exactly what it should be.

This article is general information for business owners, not legal or tax advice. For rules specific to your state or industry, consult your state labor department or a payroll professional.