Relationship Between Timesheets and Payroll: A Comprehensive Overview

Relationship Between Timesheets and Payroll: A Comprehensive Overview

Do you dread the tedious paperwork and calculations associated with payroll processing? Get ready for a breath of fresh air – timesheets! These powerful tools can help streamline payroll processing, ensure fair and timely pay for employees, and make your life easier. 

Today we’ll explore how timesheets impact payroll processing, the advantages of online timesheet software, as well as best practices for effective management. To top it off, we’ll review key features to look out for in timesheet and payroll software solutions before comparing some of the top options on the market. By the end of this article, you’ll be equipped with all you need to automate your timesheet process and simplify payroll. Let’s get started!

You can either scroll through or click the linked items outlined below to jump directly to any section. 

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What is a Timesheet?

A timesheet is a tool used to track an employee’s working hours. It records the start and end of work, as well as breaks and overtime for each day employees work. Timesheets can be in paper or electronic format, depending on the company’s preference. 

The information recorded on a timesheet is critical for calculating payroll accurately. This includes:

  • Name of employee
  • Date of work 
  • Start and end time of each shift
  • Overtime hours (if applicable) 
  • Break times (if applicable)
  • Salary and wages calculation

The data collected in timesheets is also used to monitor an employee’s productivity, adherence to legal regulations, and company policies. 

Manual timesheet calculation has many drawbacks

Impact of Accurate Timesheet on Payroll Processing

Accurate timesheets are critical for successful payroll operations. With precise logs of employee hours, organizations can avoid making inaccurate payments to workers, which can lead to legal and financial repercussions. 

Conversely, accurate records guarantee employees receive their appropriate remuneration promptly. To gain a deeper understanding of accurate timesheets’ influence on payroll processes, let’s take a closer look.

Prevent Errors In Payroll Calculations

Without accurate records of hours worked, it’s too easy to miscalculate wages and end up overpaying or underpaying employees—an issue that not only creates extra work for payroll staff but can also damage employee morale and trust in the organization. Accurate timesheets help secure correct payroll calculations and ensure employees are paid what they deserve for their hard work.

Compliance With Labor Laws And Regulations

Organizations must maintain precise records of their employees’ hours and pay rates. Failing to do so can lead to hefty fines and lawsuits, putting the organization at risk of serious legal ramifications. Accurately tracked timesheets are key in helping businesses comply with labor regulations, safeguarding them from any potential repercussions.

Identify Trends And Issues In Employee Workflow

By analyzing accurate timesheets, organizations can identify trends that will help them optimize scheduling and resource allocation. This leads to cost reduction and increased efficiency. Additionally, these timesheets provide data that allow employers to track employee performance and productivity, allowing them to identify areas for training and improvement.

Automated timesheet calculator helps identify trends

Benefits of Online Timesheet Software over the Traditional Methods

A timesheet is a document used to record the time an employee spends on specific tasks. Before digital timesheets, paper-based systems were used to track and calculate employee hours manually. While businesses commonly used this method in the past, it created a lot of room for human error which could lead to incorrect payroll calculations or even missed payments.

Online timesheet software can help eliminate these issues by providing accurate data accessible from anywhere with internet access. Advanced timesheet software solutions offer various advantages, such as: 


Online timesheet software is highly customizable, allowing you to tailor the system to match your needs. You can customize the interface and features according to employee roles, job titles, departments, etc. This ensures everyone can access only the information they need and makes it easy for managers or supervisors to track their team’s performance in real-time. 

Reporting and Analytics

Advanced online timesheet software also offers robust reporting and analytics tools, allowing you to generate reports on employee performance, overtime, project progress, and more. This information can be used to identify areas for improvement, manage budgets more effectively, or track trends over time. 


Timesheet and payroll software are also much more secure than paper-based systems. Data is stored and backed up in the cloud, so it can’t be lost or destroyed due to natural disasters or other unforeseen events. Additionally, access rights can be granted on a case-by-case basis, meaning only authorized personnel have access to sensitive information. 

A security lock

Easy Scalability

When you use the traditional manual approaches to timesheet tracking and payroll processing, it can be difficult to track hours accurately for many employees. Online timesheets are much easier to scale up or down as your business grows or shrinks. This makes it easy to adjust the system according to changes in staffing levels without investing in new software. 

Best Practices for Effective Timesheet Payroll Management

When using timesheets, accurate recordkeeping is essential to ensure your employees’ timely and fair payment. Here are some best practices for effective timesheet payroll management:

  • Clear communication: Ensure that the expectations and guidelines for timesheet submission are clear to all employees. This can help eliminate confusion, avoid mistakes in record-keeping, and ensure accurate payroll processing. 
  • Consistent timekeeping: Employees should be encouraged to keep track of their hours worked every day and submit their timesheets regularly (e.g., weekly or biweekly).  
  • Up-to-date work logs: Maintaining up-to-date records of employee hours is critical for accurate payroll processing. A digital system can make storing and managing data quickly and securely easier. 
  • Verification of hours/minutes worked: Ensuring that the timesheets submitted by employees reflect their actual hours worked is vital. Supervisors should review and verify employee time records before payroll processing begins. 
  • Accurate pay calculation: Once supervisors have verified the timesheets, it’s essential to accurately calculate an employee’s wages based on their hours worked (e.g., overtime) and other applicable factors (e.g., deductions).
  • Automated payroll processing: An automated system can streamline everything from timesheet entry to pay calculations. This helps eliminate manual data entry, decrease errors, and improve accuracy in payroll processing.  

Top Features of Timesheet and Payroll Software

Timesheets are essential tools for accurately tracking employee hours, which means they’re a critical part of payroll processing. To make the most of timesheet-driven payroll systems, look for software that has these key features: 

  • Time and attendance tracking
  • Project management capabilities
  • Employee scheduling and time-off tracking
  • GPS location tracking 
  • Integration with accounting software 
  • Real-time data sync 
  • Reporting and analytics capabilities 

These features will help you better manage and monitor employee productivity, easily track hours for payroll processing, and gain insight into how your business is performing. Now let’s review some of the best timesheet software options. 

3 Best Payroll Timesheet Software

When it comes to timesheet software, there are many different options available. Here are some of the top-rated payroll and timesheet solutions: 

1. – Overall, the Best Timesheet Payroll Automation Tool for Small Business being the best timesheet payroll software is an automated timesheet and payroll solution offering businesses a complete suite of features to help accurately manage their employees’ hours and pay. It’s designed for small to mid-sized companies and works well for larger organizations, independent contractors, and freelancers. 

The platform simplifies the time-tracking process with its intuitive interface and provides powerful analytics tools to identify areas where you can improve productivity. 



  • Attendance and time tracking: $4 per user/month
  • Project time tracking: $6 per user/month

2. FreshBooks – Specialized Invoicing Solution with Integrated Timesheet Management

Freshbooks interface

FreshBooks provides a specialized invoicing solution that also includes integrated timesheet management. The platform allows businesses to track employee hours and generate custom invoices for each user, making it easy to manage payroll without manually entering data every time. 


  • Integrated timesheet and invoicing
  • Automatic payroll calculations 
  • Recurring billing with payment reminders 
  • Automated tax forms and reports 
  • Employee expense tracking 
  • Customizable invoice templates
  • Secure mobile app for remote access to client data


The Plus package starts from $12 per user/month, with support for up to 50 users.

3. ClockShark – Timesheet and Payroll Solution for On-field Businesses 

Clockshark dashboard

ClockShark lets you track employee time, manage team schedules and employee locations, and generate accurate payroll reports. The solution is ideal for businesses that need to track the hours of employees who are on the go or out in the field—such as construction workers, landscaping crews, janitorial services staff, and more. 


  • Geofencing time tracking with GPS location data
  • Employee scheduling and shift management 
  • Real-time job costing and reporting
  • Employee attendance tracking 
  • Mobile app for remote access to employee data 


The Standard plan starts from $16 per user/month. 

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Wrap-up: Automate Timesheet for a Streamlined Payroll Processing

Using the right timesheet software lets you easily track employee hours, ensure fair and timely employee pay, and gain insight into your business’s performance. With accurate timesheet records, you’ll save time on manual calculations and paperwork associated with payroll processing. is one of the best timesheet solutions available on the market today. It helps automate payroll processing by tracking employee hours accurately in real-time across multiple locations and integrating seamlessly with accounting systems. Sign up for today to streamline payroll processing and maximize efficiency!