What is daylight saving time?
Daylight saving time (DST) is the practice of adjusting clocks forward by an hour in spring (“spring forward”) and back by one hour in autumn (“fall back”) to make better use of natural daylight.
In Australia DST affects:
- New South Wales
- Victoria
- South Australia
- Tasmania
- Australian Capital Territory
Note: Queensland, Western Australia, and the Northern Territory do not observe DST.
2024 Daylight Saving Dates
- Starts: Sunday, 6 October 2024 (2:00 AM -> 3:00 AM)
- Ends: Sunday, 6 April 2025 (3:00 AM -> 2:00 AM)
How does daylight saving affect payroll?
Time changes impact businesses with:
- Shift workers (e.g., overnight staff may work 1 hour more or less)
- Overtime calculations (especially for employees crossing time zones)
- Timesheet accuracy (incorrect clock-ins/outs can lead to payroll errors)
For example, a nurse working a night shift during the DST transition may log 11 hours instead of 10, or vice versa. Ensuring payroll reflects these changes accurately is critical to avoid underpayments or overpayments.
Handling daylight savings in payroll software
To manage DST effectively, your payroll software should:
- Automatically adjust clocks for the affected regions.
- Correctly calculate overtime and penalty rates to avoid under/overpayments.
- Support multi-state businesses by tracking local time per employee.
Daylight saving payroll FAQ
- Do employees get paid for the extra hour when clocks go back?
- Yes, employees working overnight during the change will be paid for the extra hour worked when clocks go back in April. Similarly, they will be paid only for the actual hours worked when clocks move forward in October, even if their shift duration appears shorter.
- Does Microkeeper adjust rosters automatically?
- Yes, Microkeeper automatically updates rosters to reflect DST changes, ensuring schedules align with the new time. However, timesheets spanning the time change require manual adjustments as outlined above.
- What if my team works across different time zones?
- Payroll systems should track local time per employee, ensuring accurate timesheets and payroll exports for each location.
- How do I ensure my payroll is DST-ready?
- Confirm your business location in your payroll software settings before DST starts or ends.
- Notify staff about timesheet checks during the transition period to avoid discrepancies.
Tips for managing DST in payroll
- Audit past DST payroll: check for discrepancies in overtime payments or unexplained wage spikes/dips around April/October transitions. Use payroll reporting tools to identify anomalies quickly.
- Communicate with employees: ensure employees understand how DST affects their shifts and pay by sending reminders before each transition date. Transparency prevents disputes over hours worked during these periods.
- Review payroll policies: update policies to reflect how your business handles DST adjustments, including guidelines for manual timesheet corrections if needed.
Important notice for Microkeeper users
Microkeeper simplifies daylight saving adjustments for businesses by automatically updating rosters when clocks change. However, timesheets require manual adjustments for shifts that span the time change.
- When clocks move forward (October): move the end time back by one hour to account for the lost hour.
- When clocks move backward (April): move the end time forward by one hour to account for the extra hour worked.
For example:
If the clock moved forward by one hour during a 4-hour-shift:
- Original shift: 00:00 to 05:00 (extra hour added)
- Modified shift: 00:00 to 04:00 (5 hours - 1 hours= 4 hours total)
This ensures accurate payroll calculations while maintaining compliance with Fair Work regulations.
Daylight saving time presents unique challenges for payroll teams, especially when managing shifts that span time changes or employees working across different states and time zones. By understanding how DST impacts payroll and using tools like Microkeeper to automate roster adjustments while manually correcting timesheets as needed, businesses can ensure compliance and maintain accurate payroll processing during this period.
If you have any questions, don’t hesitate to reach out to our support team.