Glossary
Payroll

Time Tracking

By: Alec Hollingsworth
Updated:  
June 16, 2025

DEFINITION:

Time tracking is the process of recording employee work hours for payroll and project allocation purposes.
Time tracking in payroll refers to the systematic recording of employee work hours, including regular time, overtime, breaks, and paid time off. This process ensures accurate calculation of wages, compliance with labor laws, and proper allocation of labor costs to specific programs or grants. Nonprofits often require meticulous time tracking to fulfill grant requirements and demonstrate program efficiency. Effective time tracking also aids in budget planning and audit preparation, as organizations can provide detailed records of how staff time is utilized across projects. Many organizations use digital tools or software to simplify capturing and reporting employee hours.

Key Takeaways

  • Ensures employees are paid accurately for hours worked
  • Supports compliance with labor laws and grant requirements
  • Enables proper allocation of staff costs to programs or funds
  • Facilitates transparent and auditable payroll records

Why It Matters

Accurate time tracking ensures fair pay, legal compliance, and transparent grant reporting.

Real World Example

A nonprofit youth center receives a government grant to fund an after-school program. To comply with the grant’s reporting requirements, staff must track their hours spent on this program separately from other duties. Using a time tracking system, employees log their daily hours dedicated to the grant-funded activities. At the end of the pay period, the organization can accurately calculate wages paid from the grant and demonstrate to the funder how resources were used. This also ensures that only eligible time is billed to the grant, protecting both the nonprofit and the grantor.

How Aplos Helps

Aplos Payroll streamlines time tracking by allowing employees to log hours directly in the platform. This data flows seamlessly into payroll processing, simplifying wage calculations and grant reporting for nonprofits. With Aplos, organizations can easily track employee hours by fund or project, supporting detailed expense allocations and compliance.
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Frequently Asked Questions

Why is time tracking important for nonprofits?

Nonprofits often need to track staff hours by project or grant to ensure compliance, accurate wage allocation, and transparent reporting to funders.

Can Aplos Payroll handle time tracking?

Yes, Aplos Payroll allows employees to log time, which integrates with payroll processing and fund allocation for accurate reporting.

What methods are commonly used for time tracking?

Organizations may use paper timesheets, spreadsheets, or digital software solutions like Aplos Payroll to capture and manage employee work hours.

How does time tracking support grant compliance?

Accurate time tracking provides documentation that grant funds were used appropriately, meeting funder requirements and supporting audits.

What should be included in a time tracking record?

A complete time tracking record should include employee name, date, hours worked, type of work or project, and supervisor approval.