Automate Timesheet Processing: Stop Chasing Hours and Start Paying People Accurately

It’s Tuesday morning. Payroll is due Thursday. Your office administrator has received timesheets from 30 of your 48 employees. Some came in on paper. Some were emailed as spreadsheets. Two people sent text messages with their hours. The remaining 18 haven’t submitted anything yet.

Over the next 48 hours, your admin will send three reminder emails, make a dozen phone calls, manually enter every timesheet into a spreadsheet, calculate overtime for each employee under their applicable award or agreement, double-check public holiday rates, cross-reference leave records, and then key the final numbers into the payroll system. If she’s lucky, she’ll finish with a few hours to spare. If someone disputes their hours or a manager questions an overtime claim, she’ll be working late.

This scene — or something like it — plays out in thousands of Australian businesses every fortnight. It’s a process that’s ripe for automation, and one where the financial and compliance risks of getting it wrong are genuinely serious.

What Manual Timesheets Actually Cost

The direct cost is obvious: admin time. Research from the Australian Payroll Association suggests that businesses processing timesheets manually spend between 5 and 10 minutes per employee per pay cycle on collection, verification, and data entry. For a business with 50 employees on fortnightly pay, that’s 4 to 8 hours every two weeks — or roughly 100 to 200 hours per year — just on timesheet processing.

But the indirect costs are where the real damage hides.

Payroll errors. Manual data entry has an error rate of roughly 1-4%. Applied to payroll, that means 1 to 4 employees out of every 100 are being paid incorrectly in any given pay cycle. Some are overpaid (which is awkward to recover). Some are underpaid (which is a compliance breach under the Fair Work Act). Both erode trust.

Overtime miscalculations. Australian employment awards are notoriously complex. An employee under the General Retail Industry Award has different overtime rates for the first two hours versus subsequent hours, different rates for Saturday versus Sunday, and different rates again for public holidays. Calculating this correctly by hand, across multiple employees with varying shift patterns, is an exercise in precision that no human should have to perform repeatedly.

Time theft and buddy punching. The Association of Certified Fraud Examiners estimates that time theft costs businesses an average of 4.5 hours per employee per week. That includes everything from rounding up start times to having a colleague clock in for you. Manual timesheets make this almost impossible to detect.

The Four Stages of Timesheet Automation

Stage 1: Digital Time Capture

The first step is replacing paper timesheets and spreadsheets with digital time entry. This can range from simple to sophisticated:

Basic: Employees enter their hours into a web form or mobile app at the end of each day or shift. This eliminates paper and standardises the format, but still relies on the employee remembering and reporting accurately.

Intermediate: Employees clock in and out using a mobile app with GPS verification, a tablet-based kiosk at the work site, or a biometric scanner. The system records the actual start and finish times, removing the possibility of rounding or estimation errors.

Advanced: Time is captured automatically from the systems employees already use. A field technician’s hours are derived from their job management app (when they started and finished each job). An office worker’s hours are captured from their computer login/logout times. A driver’s hours come from their vehicle tracking system. No separate time entry required at all.

Stage 2: Award Interpretation and Overtime Calculation

This is where automation saves the most money and prevents the most compliance risk.

Australian employment awards contain hundreds of rules about ordinary hours, overtime rates, penalty rates, shift loadings, allowances, and break requirements. The Building and Construction General On-site Award alone has different rates for:

• Ordinary hours (38 per week)
• First two hours of overtime (time-and-a-half)
• Overtime beyond two hours (double time)
• Saturday work (time-and-a-half first two hours, then double time)
• Sunday work (double time)
• Public holidays (double time and a half)

And those rates change depending on the employee’s classification level. An automated system applies these rules consistently, every time, for every employee. A human doing it manually will make mistakes — not because they’re careless, but because the rules are genuinely complex and the volume is relentless.

Stage 3: Approval Workflows

Before hours are processed for payroll, they typically need manager approval. In a manual process, this means emailing a spreadsheet to each manager, waiting for them to review and confirm, chasing when they don’t, and reconciling their changes.

Automated approval works like this:

1. At the end of the pay period, each manager receives a notification with their team’s timesheets pre-populated from the time capture system
2. They review the hours, check for anomalies (flagged automatically — unusually high overtime, missing clock-outs, hours that don’t match scheduled shifts), and approve with one click
3. If they don’t approve within 24 hours, reminders escalate
4. Approved timesheets flow directly to payroll processing

The manager’s job shifts from verifying data entry to reviewing exceptions. Instead of checking 15 timesheets line by line, they’re reviewing 2 or 3 flagged items that need attention.

Stage 4: Payroll Integration

The final step is eliminating the manual transfer of approved hours into your payroll system.

Modern payroll platforms — Xero Payroll, KeyPay (now Employment Hero Payroll), MYOB, and others — all support data imports or direct API integrations. Approved timesheets, with overtime and allowances already calculated, flow directly into payroll without anyone re-keying a single number.

This doesn’t just save time. It eliminates the most error-prone step in the entire process: the manual transfer of data from one system to another. Every time a number is re-typed, there’s a chance of a mistake. Remove the re-typing and you remove the risk.

Common Pitfalls

Choosing a tool that doesn’t understand Australian awards. Many international timesheet platforms (TSheets, Harvest, Toggl) track time well but don’t interpret Australian awards natively. You’ll still need to calculate overtime and penalty rates separately. Look for platforms with built-in Australian award interpretation — Deputy, Tanda, and Employment Hero all handle this.

Ignoring the change management. Employees who’ve been filling in paper timesheets for 15 years will resist switching to an app. Don’t just deploy the technology and hope for the best. Explain why the change is happening (hint: “so you get paid correctly” resonates more than “to improve efficiency”), provide training, and run both systems in parallel for a pay cycle or two.

Not accounting for rounding rules. Many awards and enterprise agreements have specific rules about rounding — whether time is rounded to the nearest 5 minutes, 15 minutes, or not at all. Make sure your automated system applies the correct rounding rules for your workforce. Getting this wrong can create systematic over- or under-payments that compound over time.

Your Next Steps

This week: Calculate how many hours your team spends on timesheet collection, chasing, verification, and data entry each pay cycle. Include the manager’s time reviewing and approving, not just the payroll administrator’s time. The total will be higher than you expect.

This month: Identify which employment awards or enterprise agreements apply to your workforce and check whether your current process applies the rates correctly. If you’re not confident, get a payroll audit — the cost of an audit is a fraction of the cost of systematic underpayments and the Fair Work penalties that come with them.

This quarter: Implement digital time capture for at least one team or site. Even a simple clock-in/clock-out app with manager approval eliminates the collection and chasing steps and gives you clean data to work with. Once you’ve proven the concept, rolling it out across the business is straightforward.

Paying people should be the most reliable process in your business. When timesheets are manual, reliability depends on every employee submitting on time, every manager checking carefully, and every calculation being done correctly — every single pay cycle. That’s a lot of things that need to go right. Automation doesn’t remove the human judgment. It removes the human error. And in payroll, that distinction is worth real money.