How to Track Employee Hours Legally in the UK (2026 Guide)
UK employers must track working hours under the Working Time Regulations. Learn the legal requirements, GDPR rules for time data, what records to keep, and the best methods for compliant time tracking.
Tracking employee hours isn't just good practice — it's a legal requirement. Under the Working Time Regulations 1998, UK employers must keep accurate records. Get it wrong and you risk fines, tribunal claims, and HMRC penalties.
What UK Law Requires
Working Time Regulations 1998
You must keep records showing compliance with:
- 48-hour maximum week (unless employee opts out)
- 20-minute rest break for every 6 hours worked
- 11 consecutive hours daily rest
- 24 hours weekly rest (or 48 hours per fortnight)
- 8-hour maximum for night workers
National Minimum Wage
HMRC requires records proving you're paying at least NMW/NLW:
- Total hours worked each pay period
- Pay received (including deductions)
- Evidence hourly rate meets minimum wage
Penalty: HMRC can fine employers up to 200% of underpayments if records don't prove minimum wage compliance.
What You Must Track
Minimum required:
- Employee name and identifier
- Start and end time each day
- Total hours worked per day/week
- Break times
- Overtime hours
- Holiday taken
Also recommended:
- Project or cost center allocation
- Approval status and approver name
- Any 48-hour opt-out agreements
Stay Compliant Automatically
TimeTally tracks all required data fields, maintains secure audit trails, and stores records for 6+ years. HMRC-ready exports and Working Time Regulations monitoring included.
14-day free trial • No credit card required • Set up in 5 minutes
Legally Acceptable Methods
Digital Timesheet Software
Cloud-based systems with automatic timestamps and audit trails.
Fully compliant. Strongest evidence.
Clock-In Systems
Biometric, card readers, or app-based clock-in/out.
Fully compliant. Tamper-proof records.
Paper Timesheets
Traditional paper signed by employee and manager.
Compliant, but higher risk if records lost.
No Records / "Trust System"
Assuming salaried staff work set hours without tracking.
Not compliant. Must track even salaried employees.
Common Mistakes
- Not tracking salaried employees — WTR applies to everyone
- Deleting records too soon — Keep 2+ years (6 recommended)
- Not recording unpaid overtime — All hours must be tracked
- Allowing edits after approval — Need audit trail of changes
- Excel without backups — Must maintain secure copies
Penalties
- HMRC: 200% of underpayments + public naming
- HSE: Unlimited fines for Working Time breaches
- Tribunal: Unpaid wages claims go back 2 years
Avoid HMRC Penalties Completely
Digital time tracking with automatic compliance checks, secure cloud backups, and complete audit trails. TimeTally meets all UK legal requirements for employee hour tracking.
14-day free trial • No credit card required • Set up in 5 minutes
Track Hours Legally with TimeTally
Automatic audit trails, secure cloud storage, HMRC-compliant records, and Working Time Regulations monitoring. Built for UK employment law compliance.
14-day free trial • No credit card required • Set up in 5 minutes
Compliance Checklist
- ☐ All employees (including salaried) have hours tracked
- ☐ Records include start time, end time, breaks, total hours
- ☐ Manager approval before hours are finalized
- ☐ Records stored for at least 2 years (6 recommended)
- ☐ Audit trail of any changes
- ☐ Weekly hours totaled for 48-hour check
- ☐ Automatic backups