Time tracking: what's required and how to keep accurate records

Employee time tracking is the process of recording the working hours of each worker — including the start time, end time, and any rest breaks. Time tracking allows employers to keep accurate records for payroll, project management, and compliance purposes.

The phrase ‘time tracking’ covers all methods, from manual records stored in a spreadsheet through to dedicated attendance management software that creates timesheets automatically.

In the UK, keeping accurate records of hours worked and rest breaks is essential in order to comply with the Working Time Regulations (1998). The law sets out the maximum working hours per week, minimum rest breaks, and annual leave entitlement. Time tracking is the most effective way to record this information.

Employers must also ensure that workers are paid the National Minimum Wage, National Living Wage, or apprentice rate (as appropriate) and keep records for six years. Tracking hours worked allows employers to confirm that workers are being paid correctly in line with the law and their contracts.

Ensure working time regulations are followed

With Personio, you can define suitable guidelines for your employees' working time models for each location, including rules on maximum working hours, breaks, and overtime limits.

Learn more about time tracking with Personio

Time tracking is a legal requirement, but it’s also beneficial in other ways. Knowing the hours spent on a project means you can evaluate costs and effectiveness, and monitoring working hours means you can prompt employees to use annual leave before the end of the year.

Time tracking allows you to:

• Keep accurate records: Know that your employee records are based on fact, rather than an individual’s short-term memory.

• Support employment law compliance: Log working hours so you can evidence compliance with the Working Time Regulations.

• Understand how time is being spent: Find out how much time employees are spending on internal or client projects, and whether it’s worth it.

• Identify ways to improve processes: Learn which processes are costing you time and money, so you can make informed decisions.

Time recording used to involve punch-in cards and clocks, but there’s now much more variety for in-person and digital time tracking methods. Some organisations still rely on more manual processes, while others use one (or more) models depending on the team’s location and work style.

Traditional time tracking models use machines or mechanical clocks to create a physical record of working hours. These methods are inexpensive, simple, and provide an accurate record — as long as they’re used honestly. Manual time records can be open to manipulation, human error, and mechanical issues.

Examples of traditional models include:

• Paper timesheets

• Punch clocks

• Time logbook

Best for: Small businesses on a budget who want to rely on physical paper methods, rather than digital ones.

Digital time tracking methods include everything from a spreadsheet that employees manually update through to background software that automatically generates timesheets. Software can help with accuracy, workflow automation, and audit logs — but the process needs to be simple and fuss-free or it’ll become an obstacle.

Examples of electronic time tracking models include:

• Manual spreadsheets

• Time tracking software

• Automated timesheets

• Automatic device tracking software

Best for: Remote or hybrid workforces who want a system that saves time and reduces errors.

In-person time tracking models give office-based and deskless teams a way to clock in and out without logging into a cloud-based tool. Employees can use kiosks, terminals, or mobile apps to sign in. Biometric systems offer enhanced security, but it’s wise to consider how you’ll collect (and store) this sensitive data in line with data protection regulations.

Examples of in-person time tracking models include:

• In-person terminals or kiosks

• Biometric systems

• Mobile apps with GPS or geofencing

Best for: Hybrid or in-person teams who want the accuracy and security of a modern time tracking system.

Most teams have moved away from traditional time tracking methods, but some still rely on spreadsheets and manually-managed systems. Spreadsheets are a good starting point, but time tracking software offers major upgrades in security, accuracy, compliance, and user experience.

The right time tracking software can:

• Save time compared to traditional timesheets: Automate as much of the process as possible, so the only task left is to input or confirm working hours.

• Apply the right working hours rules based on location: Set rules and timesheets that align with every worker’s rights and your compliance requirements.

• Alert managers to potential issues: Flag when an employee is working too much, too little, or hasn’t taken enough annual leave.

• Proactively remind employees to use their holiday allowance: Share up-to-date leave balances with employees and encourage them to book time off.

• Create payroll-ready records: Gather up-to-date attendance data automatically, so you can send process-ready reports to your payroll provider or software.

• Give employees easy access to time records: Let employees see their own timesheets and records, so they feel at ease that they’re being paid correctly.

• Improve project management reporting: Automatically assign hours worked to clients or campaigns for better project and task management.

• Support effective resource management: Assign employees to projects based on their available working hours.

• Generate client-ready invoices: Prepare accurate timesheets, reports, and invoices to share with clients.

• Give you access to valuable insights: Identify trends, understand upcoming issues, and respond proactively before a risk becomes an HR compliance concern.

“Tracking working hours for individual projects is particularly important to us. As a charitable foundation funded by donations, our Time Tracking reports allow us to transparently show the specific work our employees have done for each project.“

Celina Fischer

Office Manager,Strahlemann Stiftung

Time tracking isn’t a luxury — it’s a core part of staying compliant with UK employment law, and a function that should sit within your central system of record. Swap manual timesheets or standalone tools for time tracking that’s an integral part of an intelligent HR platform.

Personio’s highlights include: 

• Flexible and compliant time management tailored to your needs

• Easy time tracking for every team

• Reliable attendance data for payroll

• Automated compliance checks

• Workflow automations for non-compliant time entries

• Fixed and flexible work schedules

• Overtime and accrual rules

• Multiple time tracking methods — including location-based and clock-in terminals

• Project tracking with reliable data for billing and analysis

• Integrations with time management apps like Papershift and Planday

• API access

No, timesheets aren’t legally required in the UK, but employers must keep track of employee working hours. This requirement is set out in the Working Time Regulations (1998). Many businesses choose to use timesheets because they’re easy to set up, use, and analyse for trends.

Yes, you can use multiple time tracking methods — there’s no law prohibiting this. Having different methods of recording working hours is useful in organisations where teams work differently or across regions, so that you can capture information in the most effective and seamless way for each individual.

The best way to track employee time depends on how your employees typically work. Automated, electronic time tracking software is a good fit for most organisations and can be used alongside other methods like kiosks or mobile apps with geofencing. 

Electronic time tracking simplifies documentation, ensures legal compliance, saves time, and offers transparency for everyone involved. Digital time tracking is the recommended model for most organisations, except where in-person methods are more accurate or easier to achieve.

To properly track working hours in a multi-country or multi-entity organisation you need an HR system that can support different rules, templates, or schedules for each location or entity. Ideally the software automatically recognises the employee’s location and provides the right options and rules — like Personio.