How to Calculate Hours Worked (With Lunch Breaks & Overtime)
Calculate hours worked correctly: decimal hours, unpaid lunch breaks, weekly overtime at 1.5×, and the 7-minute rounding rule — with a full timecard example.
Payroll disputes almost always come down to two arithmetic traps: converting hh:mm to decimal hours incorrectly, and subtracting unpaid lunches with the wrong sign. Here's how to do it correctly, plus how weekly overtime and the 7-minute rule fit in.
Decimal hours vs hh:mm — the 7:30 trap
7 hours 30 minutes is not 7.30 hours. It's 7.5 hours. Minutes are base-60, decimals are base-10 — you have to divide:
- Decimal hours = hours + (minutes / 60)
| Time worked (hh:mm) | Decimal hours |
|---|---|
| 4:15 | 4.25 |
| 6:20 | 6.33 |
| 7:30 | 7.50 |
| 8:45 | 8.75 |
| 9:10 | 9.17 |
Payroll systems store hours as decimals because they multiply cleanly by a rate. Every "my paycheck looks short" complaint starts here.
Subtracting lunch breaks
Only unpaid breaks (typically 30+ minutes) are subtracted. Paid short breaks (5–15 minutes) stay in the total.
- Hours worked = (Clock-out − Clock-in) − unpaid break
For a shift 8:15 AM → 5:00 PM with a 45-minute unpaid lunch:
- Elapsed = 8h 45m
- Minus lunch = 8h 00m = 8.00 hours
Weekly timecard example
A five-day week with a 30-minute unpaid lunch each day:
| Day | In | Out | Break | Hours |
|---|---|---|---|---|
| Mon | 8:00 | 5:15 | 0:30 | 8.75 |
| Tue | 8:00 | 6:30 | 0:30 | 10.00 |
| Wed | 8:00 | 5:00 | 0:30 | 8.50 |
| Thu | 8:00 | 6:00 | 0:30 | 9.50 |
| Fri | 8:00 | 4:45 | 0:30 | 8.25 |
| Total | 45.00 |
Compute each row with the Hours Calculator and total in decimal.
Overtime at 1.5×
Under US federal law (FLSA), non-exempt employees earn 1.5× their regular rate for hours over 40 in a single workweek. State rules can add daily overtime (California: >8 hours/day) or double-time thresholds.
Applying weekly OT to the 45-hour week at $22/hour:
- Regular: 40 × $22 = $880
- Overtime: 5 × $22 × 1.5 = 5 × $33 = $165
- Gross weekly: $1,045
To go from gross weekly to annual — and from annual back to hourly — the Salary Calculator handles both directions.
The 7-minute rule
Employers may round clock-in/out times to the nearest quarter-hour as long as rounding doesn't systematically favor the employer over time. The most common implementation:
- Clock times 1–7 minutes past a 15-minute mark → round down
- Clock times 8–14 minutes past → round up
So clocking in at 8:07 rounds to 8:00; at 8:08, to 8:15. This is legal because it evens out — but only if it truly does. If your employer rounds down 8:07 arrivals but rounds up 4:53 departures, that's a wage-and-hour problem, not a rounding rule.
Common mistakes to check
- Treating hh:mm as decimals. 7:30 ≠ 7.30. Convert before multiplying.
- Subtracting paid breaks. Short paid breaks stay in the total.
- Applying daily OT under a state where only weekly OT applies (or vice versa).
- Rounding your side but not theirs. Rounding must be neutral over time.
FAQ
How do I convert minutes to decimal hours for payroll? Divide minutes by 60. So 15 min = 0.25 h, 30 min = 0.5 h, 45 min = 0.75 h. 7 hours 30 minutes is 7.5 hours, not 7.30.
Is lunch break included in hours worked? Only if it's paid. Unpaid meal breaks of 30+ minutes are subtracted from the total. Paid short rest breaks (typically ≤20 minutes) stay in.
When does overtime start — daily or weekly? Federal FLSA is weekly at over 40 hours. Some states (California, Alaska, Nevada) also require daily overtime after 8 hours in a workday.
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*Add up your week fast with the free Hours Calculator — handles multiple shifts, breaks, and decimal conversion in one pass.*