2 Ways to Calculate Hours Worked in Accounting

To calculate the hours worked is the part of cost accounting. In cost accounting, we need to calculate labor cost. We also need to calculate it for paying salary and wages and to record it in the books.  If we are paying our laborers on the hour basis, we have to determine hours worked. There are two main ways to calculate hours worked in accounting. One is manual way and second is through using of Excel formula in computer.

Now, we are discussing the steps in these two ways.

1st Way : Manual Way to Calculate Hours Worked 

Keep a register for calculating hours worked manually. Record when an employee comes in your factory or office. Record when an employee leaves your factory or office. Not just one employee but record manually the time of in and out of each employee. Make 6 columns in your register. First column is of date, second column is of name of employee. Third column is of time of entry of employee. Fourth column is of time when employee leaves from duty. Fifth column is of lunch or cash leave. Sixth column should be of total hours worked in a day. Now, if you want to pay the salary or wages weekly, total of the sixth column's working days upto week. 

Date	Name of Employee	In	Out	Lunch Break or Cash Leave	Total Time (Hours Worked in a Week)
	Mohan
1/12/2013		9 : 00 a.m.	6 :00 p.m.	1 hour	8 hours
2/12/2013		9 : 00 a.m.	4 :00 p.m.	1 hour	6 hours
3/12/2013		-	-	1 hour	8 hours
4/12/2013		-	-	-	-
5/12/2013		9 : 00 a.m.	5:00 p.m.	1 hour	7 hours
6/12/2013		9 : 00 a.m.	6 :00 p.m.	1 hour	8 hours
				Total	37 hours

2nd Way : To Use of Ms Excel for Calculating Hours Worked 

By using of excel, you can easily calculate hours worked. For this, we have showing following example

Date	Person	Time in	Time Out	Hours Worked
1/12/2013	Mohan	8:00 AM	5:00 PM
1/12/2013	Sohan	9:30 AM	5:35 PM
1/12/2013	Sham	10:00 AM	11:00 PM
1/12/2013	Ram	8:30 AM	4:30 PM
1/12/2013	Gita	10:30 AM	11:00 PM
1/12/2013	Sita	11:30 AM	11:30 PM

Now, after hours worked cell, we will select next cell and change its cell format as general. See following screenshot.

Now, put following formula 

= (time out - time in ) *24

Now, drag first cell up last employee's row. 

You will find following hours worked.

Date	Person	Time in	Time Out	Hours Worked
1/12/2013	Mohan	8:00 AM	5:00 PM	9
1/12/2013	Sohan	9:30 AM	5:35 PM	8
1/12/2013	Sham	10:00 AM	11:00 PM	13
1/12/2013	Ram	8:30 AM	4:30 PM	8
1/12/2013	Gita	10:30 AM	11:00 PM	12.5
1/12/2013	Sita	11:30 AM	11:30 PM	12