Time tracking software does two different jobs, and mixing them up is the most common reason people buy the wrong tool. One is recording employees' working hours to meet legal duties and feed payroll. The other is recording billable hours so you can invoice clients or see which projects lose money. A few tools do both well; most are better at one.
Tracking staff hours
If you employ people, the Working Time Regulations 1998 expect you to keep adequate records showing that workers are not averaging more than 48 hours a week, unless they have opted out in writing. Those records need to be kept for two years. The law doesn't prescribe a tool, so paper timesheets, a spreadsheet or time tracking software for employees are all acceptable. Software starts to pay for itself once you have shift patterns, remote staff, or hours that need to flow into payroll. GOV.UK sets out the rules on maximum weekly working hours.
Holiday is the other job worth automating. Most workers are entitled to 5.6 weeks of paid leave a year, capped at 28 days, and working out accrual by hand for part-time or irregular staff is where mistakes creep in.
Monitoring is not the same as tracking
Recording start and finish times is routine. Screenshots, keystroke logging or webcam checks are a different matter. The ICO published guidance on monitoring workers in October 2023 (there is a consultation summary on its site), and the message is that monitoring under UK GDPR must be necessary, proportionate and transparent. In practice: tell staff what you collect and why, keep only what you need, and choose the least intrusive method that does the job. For recording hours, plain start and stop timers or approved timesheets are usually enough.
Billing by the hour: consultants and freelancers
For time tracking software for consultants the priorities are different. You need to mark time as billable or non-billable, set a rate per client or project, lock entries once they have been invoiced, and send hours straight into an invoice. A time tracker online that runs in the browser, plus a mobile app for starting timers away from your desk, beats reconstructing the week on Friday afternoon. If you round time up, say to the next 15 minutes, put that in your contract so the invoice never comes as a surprise.
What to compare in time tracking software for small business
| If you need | Check for |
|---|---|
| Hours for payroll | Timesheet approval and export to your payroll tool |
| Several clients | Rates per client or project, and billable flags |
| Staff on the move | A mobile app and offline entry; location features only if you can justify them |
| Legal record-keeping | Reports you can keep for at least two years, and alerts on the 48-hour average |
| Cost control | Price per user, minimum seats and the limits of the free plan |
| Freedom to leave | Export to CSV |
Free plans: starting small
Searches for time tracking software free of charge are common, and a free plan is a sensible way to test the habit before paying. Whether it is a web tool or a time tracking app free tier, free plans commonly cap users, projects or report history, so read the current limits before you rely on one. Run any tool for a full pay period and compare what it recorded with what you would have guessed.
If the hours need to reach your books, see small business accounting software with payroll. For billing, see our guide to invoice software for freelancers, and for planning who does what, project management software for small teams and construction.