Payroll timesheet best practices

A reliable payroll process starts with accurate time tracking. Many Canadian businesses still use paper timesheets or manual data entry, but these methods can quickly become time-consuming and prone to errors. Automated payroll timesheet solutions can offer a more efficient way to track hours, reduce administrative work and stay compliant with Canadian employment standards.

What is a payroll timesheet?

A payroll timesheet is a record used to track employee work hours over a pay period. Employers rely on timesheets to accurately calculate regular wages, paid time off (PTO), overtime and deductions before processing payroll. Many Canadian businesses are shifting from manual methods to payroll timesheet software and apps integrated into time and attendance solutions, which automatically collect hours and sync them directly into payroll systems for greater efficiency.

Payroll timesheets include:

• Employee name and ID
• Dates and shifts worked
• Regular and overtime hours
• PTO
• Breaks and unpaid time
• Total hours per day and per pay period

Why manual payroll timesheets create challenges

Some employers continue to rely on manual payroll timesheet templates despite the clear advantages of digital solutions. While these methods work well in a business's early stages, they often lead to challenges as the organization grows. 

The limitations of manual payroll timesheets include:

• Errors caused by manual data entry
  
• Lost time reviewing and correcting inaccurate records
  
• Difficulty in applying overtime and ensuring compliance with provincial regulations
  
•  Lack of automatic integration with Canadian payroll or Canada Revenue Agency (CRA) remittances
  
• Inadequate visibility for employees to confirm or adjust their hours

To address these limitations, time and attendance solutions automate data collection, enhance accuracy, and provide direct integration with payroll systems, thus helping improve overall efficiency.

How to automate time tracking

Automating time tracking is straightforward with a time and attendance solution that connects directly to your payroll system. Instead of filing out a paper timesheet or updating Excel files, employees simply log their hours in real-time. This data is instantly accessible to supervisors, streamlining the review process.

Here’s how it works:

• Employees clock in and out digitally: Hours are recorded instantly using a mobile app, smart clock or web interface.
• Hours sync automatically to payroll: No re-entry is required, which reduces errors and accelerates payroll processing.
• Supervisors review in real-time: Managers can approve timesheets quickly before payroll is run, enhancing efficiency.
• Attendance policies are applied automatically: The software flags late arrivals, missed shifts or overtime hours for prmpt issue resolution. 

ADP’s cloud-based time tracking and scheduling tool can help you control costs, improve compliance and enhance productivity.

Learn more

Additional time-tracking methods

Modern timekeeping solutions give employers flexible ways to track hours, enable accuracy and reduce compliance risks. Depending on your business model, these systems may be compatible with traditional punch clocks, smart time clocks, point of sale (POS) devices or mobile apps.

Smart time clocks

Smart time clocks provide a secure and easy way for employees to record their time. Workers typically enter a PIN or badge number, while facial recognition or fingerprint scans can be used to prevent time theft. Once hours are submitted, the data flows directly into the payroll timesheet software, saving time and reducing manual errors.

Time clock apps

Downloadable time-tracking apps can turn a shared tablet into a virtual time clock for teams. Many of these apps include features like facial recognition or fingerprint scanning to prevent buddy punching, resulting in a more accurate payroll timesheet that syncs seamlessly with your payroll system.

Mobile solutions

Mobile solutions are essential for employees who work off-site. These apps allow for time entries directly from a smartphone. Employers can enable geo-pinning or geo-fencing to ensure accurate clock-ins, which is particularly beneficial for industries such as construction, retail, and healthcare where employees may work in various locations.

Other tracking options

Project-based tracking allows you to record hours against specific jobs or clients, facilitating accurate billing and comprehensive cost analysis. Additionally, integrating shift scheduling enables you to compare scheduled hours with actual hours worked, allowing for effective attendance management.

How to use an Excel timesheet for payroll in Canada

An Excel timesheet can be set up with columns for dates, hours, totals and overtime. Employers then manually enter hours and calculate pay. While this may work for very small teams, it is prone to errors and does not scale effectively.

Steps to use Excel for payroll timesheets

• Record employee details and dates
• Enter regular and overtime hours
• Apply formulas for daily and weekly totals
• Manually check overtime compliance by province
• Enter totals into your payroll systems

For growing businesses, transitioning from Excel to a comprehensive time and attendance solution can ensure seamless data flow into payroll, reducing errors and saving valuable time.

Why Canadian businesses are moving to payroll timesheet software

Canadian businesses are adopting payroll timesheet software to:

• Sync hours directly into payroll
• Maintain compliance with CRA and provincial regulations
• Minimize disputes over time worked
• Gain real-time visibility into labour costs
• Free up administrative time and resources

Next steps for improving time tracking and payroll

Payroll timesheets are essential for ensuring employees are compensated accurately and that businesses remain compliant with regulations. While manual templates and Excel sheets may suffice in the short term, they typically lead to inefficiencies, errors, and compliance risks as your workforce expands.

Upgrading to an automated time and attendance solution offers Canadian businesses a more effective method for managing employee hours. With features such as mobile apps, smart time clocks, and direct payroll integration, you can simplify time tracking, improve accuracy, and reduce administrative burdens. Learn more about time and attendance solutions.

FAQs

This guide is intended to be used as a starting point in analyzing timesheet payroll and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.