Working Time Recording in 2026: What Are the Current Rules – and What Do SMEs Really Need to Do?

“Do we actually have to track working hours electronically now?”

It sounds like a simple question, yet the answers vary considerably from one company to another. Some businesses already use apps or HR software to record working hours. Others rely on Excel spreadsheets or manual processes. And some operate on a trust-based working model and wonder whether traditional time tracking fits their way of working at all.

At the same time, the ongoing discussion around electronic time tracking can easily create the impression that companies either need to introduce a new system immediately – or can simply wait until further rules are introduced.

Neither is quite right.

The general obligation to record working hours already exists. At the same time, the specific legal framework for electronic time tracking continues to evolve.

For start-ups and SMEs, this raises a much more practical HR question: Is your current time tracking process reliable in day-to-day operations – and can it evolve as your company grows and requirements change?

This is where what may initially seem like a simple documentation requirement becomes part of good HR management.

Time Tracking 2026: What Already Applies Today?

Companies do not need to wait for new legislation before addressing time tracking.

A system must already be in place that allows employees’ working hours to be recorded. In particular, this includes the start, end and duration of the daily working time.

However, this does not automatically mean that every company needs to introduce a specific app or time tracking solution immediately. At present, there is no general requirement for working hours to be recorded exclusively through an electronic system.

That distinction is important:

The obligation to record working hours already exists. How electronic time tracking will be regulated in detail in the future is a separate question.

From an HR perspective, the priority is therefore to make sure that the existing process works today. Rather than questioning the entire HR setup every time there is a new development, it is worth reviewing the current situation: How are working hours recorded? Does the process work for all employees and working models? And is it clear who is responsible for managing it?

Where specific legal questions arise, appropriate professional advice should be sought. From an operational HR perspective, however, the focus is different: creating a reliable and practical process.

What Could Still Change in 2026?

Electronic time tracking remains on the political agenda. For companies, one distinction is particularly important: what already applies today and what may still change should not be confused.

At the same time, it would make little sense to ignore future developments entirely. Companies that are already digitalising HR processes, introducing new HR software, revising payroll processes or replacing established Excel-based solutions should consider time tracking as part of that work.

This does not mean choosing the most comprehensive software available just to be on the safe side. Particularly for SMEs, the solution should fit the size of the company, its actual working models and its existing HR processes.

A good process should work today while remaining adaptable for tomorrow.

Does Every SME Need Time Tracking Software Now?

When new requirements emerge, one thought often follows quickly: we need a new tool.

But software alone does not create a good process.

Before selecting a new system, companies should first look at how work is actually organised. Are working hours fixed or flexible? Do employees regularly work from home? Are there part-time arrangements, field-based roles or shift work? How are corrections handled? And is time tracking data required for payroll or other HR processes?

A company with 15 employees and relatively consistent working hours may need a very different solution from a growing organisation with 100 employees, several locations and multiple working models.

What matters is not the number of features a system offers, but whether time tracking works reliably in practice. Employees need to know how to record their hours, errors must be easy to correct and responsibilities should be clearly defined. If the data feeds into other HR processes, unnecessary duplication should be avoided wherever possible.

A simple system that is used consistently can therefore be more effective than a complex solution that does not reflect the realities of everyday work.

Time Tracking and Trust-Based Working Hours: Can They Work Together?

Trust-based working hours are an important part of company culture in many start-ups and modern service businesses. As a result, there is still a common assumption that time tracking and trust are incompatible.

They are not.

Trust-based working hours do not automatically mean that working time is not documented at all. Employees can still have flexibility in organising their working hours within an agreed framework while their actual working time is recorded.

Communication is particularly important here. If a new system is introduced in a way that makes employees feel that every minute of their day will now be monitored, what should be an organisational process can quickly become a cultural issue.

A better approach is to communicate clearly why working hours are being recorded, how the process works and what will actually change in employees’ day-to-day work.

Trust does not replace time tracking – and time tracking does not replace trust.

Time Tracking When Working from Home: What Companies Need to Organise

A reliable process should not stop at the office door.

For hybrid and remote work, time tracking also needs to work effectively outside the workplace. A physical terminal at the company entrance may make sense for certain businesses. For a team that regularly switches between the office and working from home, a different solution may be more appropriate.

In practice, this raises very straightforward questions: How are working hours recorded when working from home? What happens if someone forgets to make an entry? How are breaks documented? And how does time tracking work while travelling or on business trips?

Not every situation requires a complicated special rule. But there does need to be one consistent process.

Good time tracking works regardless of whether someone is in the office, at home or working remotely. Employees should not have to work out from scratch how a particular situation should be handled every time something differs from the norm.

Clear Responsibilities Instead of More Administration

Employees themselves may be responsible for recording their working hours. But that does not mean the HR process manages itself.

Someone forgets an entry, a recorded time looks incorrect, an employee’s working model changes or data is needed for payroll. At that point, it needs to be clear who takes responsibility.

Who administers the system? Who can correct entries? Who answers questions? Which information is passed on to payroll?

In growing companies, these questions are often more important than deciding between Tool A and Tool B. What works informally in a small team can quickly create unnecessary coordination and manual work as the number of employees increases.

The same principle applies here: process first, tool second.

Before making a technical decision, companies should define their working models, the information they need, responsibilities and interfaces with HR administration and payroll. Otherwise, an unclear process is simply digitalised rather than improved.

Time Tracking Data Can Reveal More Than Hours Worked

A well-organised time tracking process does more than fulfil a documentation requirement. It can also provide useful insights into how work is actually organised.

If a team consistently works significantly more hours than planned, for example, it may be worth taking a closer look. Are tasks distributed inefficiently? Is additional capacity needed? Are processes unnecessarily time-consuming? Or do planned working hours simply not reflect the actual workload?

Not every deviation is significant. Periods of higher workload are part of everyday life in many companies. What becomes particularly interesting are recurring patterns.

Time tracking data can therefore also support capacity planning and workforce organisation. It does not replace proper analysis, but it can provide a stronger basis for it.

5 Common Time Tracking Mistakes SMEs Can Avoid

1. Choosing the tool before defining the process.
The software is selected before the company has established which working models and workflows actually need to be covered.

2. Leaving responsibilities unclear.
When errors, changes or questions arise, nobody knows exactly who is responsible.

3. Treating working from home as an exception.
A hybrid company needs a process that works regardless of where employees are working.

4. Keeping time tracking and payroll completely separate.
Data is maintained more than once or transferred manually even though the processes could potentially be better connected.

5. Failing to communicate the change.
A new system is introduced without clearly explaining why something is changing or how the new process is supposed to work.

A system can be technically excellent – but if employees do not understand it or use it consistently, the process will still fall short.

What Should SMEs Review Now?

There is no reason for companies to rush into implementing new software simply because of the current discussion. There are, however, good reasons to review the process they already have.

A quick check can help:

• How are working hours actually recorded today?
• Does the process also work for remote work, part-time arrangements and flexible working hours?
• Are responsibilities for questions and corrections clearly defined?
• Is time tracking effectively connected to HR administration and payroll?
• Are there unnecessary manual steps or duplicate data entries?
• Will the current solution still work as the company grows?
• Can the process be adapted to new requirements?

If several of these questions cannot be answered clearly, a new tool may not be the first thing the company needs.

Perhaps the process itself needs to improve first.

Conclusion: Good Time Tracking Starts with a Good HR Process

The discussion around electronic systems and potential new requirements can quickly shift attention towards what companies may have to do in the future.

From an HR perspective, another question is just as important: How well does time tracking work today?

Regardless of how future requirements are ultimately structured, companies need a reliable process. Different working models need to be accommodated, responsibilities should be clear and the data should fit sensibly into existing HR structures.

For start-ups and SMEs in particular, it is worth looking at time tracking as part of the bigger picture. Working hours are closely connected to remote and flexible working models, HR administration and payroll, and the data can also provide useful insights into capacity and how work is organised.

What may still work with a simple solution for 15 employees can already create unnecessary work once a company reaches 50. That makes 2026 a good time to think not only about the next tool, but about the structure behind it.

Because good HR is not about creating more administration. It is about building processes that work.

Time Tracking as Part of HR Management

Time tracking rarely exists in isolation. It is connected to working models, HR administration, payroll and other HR processes. Particularly in growing companies, it therefore makes sense to look at these workflows together rather than treating them as separate issues.

Ultimately, the goal is not to create as many processes as possible, but to establish processes that are clear, practical and reliable in everyday work.

And if you need support structuring or implementing HR processes like these, we are happy to help.

Frequently Asked Questions About Time Tracking 2026