Complete Time Tracking Guide for SMEs

Note: The new Royal Decree on digital time recording is in the processing phase (January 2026). The current recording obligation comes from Art. 34.9 of the Workers’ Statute (2019), which does not require digital format. This article anticipates the requirements set out in the draft Royal Decree.

Complete Time Tracking Guide for SMEs

If you have an SME in Spain, time tracking is not optional. Since 2019, all companies are required to record their employees’ working hours, and with the new Royal Decree on Digital Time Recording (currently in processing), requirements will be even higher: mandatory digital recording, automatic timestamp, complete traceability, and access for the Labour Inspectorate.

This guide is designed for SME owners and managers who need to understand what they must do, how to do it without complications, and how much it will really cost. No unnecessary legal jargon and with practical solutions.

What Exactly Is Time Tracking?

Time tracking is the recording of each employee’s working hours: what time they start working, when they finish, and the breaks they take during the day. It’s mandatory for all companies in Spain, regardless of size.

In practice, time tracking involves:

• Recording the entry time of each worker every day.
• Recording the exit time at the end of the day.
• Recording breaks (rest, lunch, etc.).
• Calculating hours worked, including overtime if applicable.
• Keeping records for a minimum of 4 years.
• Facilitating access to records for both employees and the Labour Inspectorate.

What Will the Law Require When the Royal Decree Is Approved?

The Royal Decree on Digital Time Recording (in processing) will establish stricter requirements than current regulations. These are the key points that will affect your SME:

Mandatory Legal Requirements

• Digital recording: Manual paper methods will not be valid as the main system. Recording must be electronic.
• Automatic timestamp: The system must record the time automatically, without the employee being able to enter it manually without leaving a record.
• Traceability: Any modification to a record (correcting a clock entry, for example) must be recorded with date, time, and reason.
• Immutability: Original records cannot be deleted or altered without leaving a trace.
• Break recording: Recording entry and exit is not enough; breaks must be reflected.
• On-site/remote differentiation: The system must distinguish between on-site and remote work.
• Overtime calculation: Calculation must be automatic, not manual.
• Access for Labour Inspectorate: Records must be available electronically for the Inspectorate if requested.
• Access for employees: Each worker must be able to view their own records.
• Access for legal representatives: If your company has a works council or staff delegates, they must have access to the data.
• Minimum 4-year retention.
• Contingency plan: You must have an alternative procedure for recording hours if the digital system fails.

Penalties for Non-Compliance

Fines for not keeping an adequate time record are classified as:

• Minor: From 70 to 750 EUR (minor formal non-compliance).
• Serious: From 751 to 7,500 EUR (no record, not retaining data, not facilitating access).

Important: The penalty applies per company, not per employee. But an inspection that detects multiple irregularities can accumulate penalties.

What Does My SME Need in Practice?

Let’s get concrete. If you have an SME of between 1 and 50 employees, this is what you need:

1. Digital Clocking Software

It’s the central piece. You need an application or platform that allows your employees to clock in (record entry, exit, and breaks) digitally, with automatic timestamp.

The most common clocking options are:

• Mobile app: The employee clocks in from their phone. Ideal for mobile teams.
• Web clocking: The employee clocks in from their computer browser. Perfect for offices.
• Browser extension: Installs in Chrome and allows clocking with one click. Very convenient for desk work.
• Kiosk mode: A tablet or fixed device at the entrance to the work centre where employees clock in on arrival. Typical in shops, factories, or workshops.
• Biometric terminal: Devices with fingerprint or facial recognition. More expensive and with additional data protection implications.

For most SMEs, a combination of mobile app + web clocking is more than enough. If you have a physical venue with employees who don’t use computers, add a kiosk.

2. Reports and Data Export

The software must generate reports showing:

• Hours worked by employee, day, week, and month.
• Overtime calculated automatically.
• Breaks taken.
• Incidents (corrected clock entries, absences, etc.).
• Differentiation between on-site and remote days.

These reports are what you’ll present if the Labour Inspectorate requests them.

3. Access for Employees

Each worker must be able to view their own records. Most software offers an employee portal or access from the same app where they clock in.

4. Contingency Plan

What happens if the software goes down? You need a documented backup plan. It can be as simple as a paper form or temporary Excel, but it must be planned and communicated to the team.

How to Implement Time Tracking in Your SME: Step by Step

Step 1: Choose Suitable Software

Not all software is the same or suitable for all companies. These are the key criteria for an SME:

• Affordable price: SMEs don’t have multinational budgets. Look for solutions from 1-3 EUR/user/month.
• Ease of use: If your employees need training to clock in, something’s wrong. It must be intuitive.
• Quick setup: You shouldn’t need weeks or a technician to get it running.
• Legal compliance: Make sure it meets all Royal Decree requirements (timestamp, traceability, inspection access, etc.).
• No lock-in: Avoid 12-month contracts. Needs change.
• Support in your language: Seems obvious, but there are international tools with support only in English.

Cleverfy meets all these criteria: from 1.50 EUR/user/month, 10-minute setup, no lock-in, and 100% Royal Decree compliance. If you want to see it in action, you can book a free demo.

Step 2: Configure the Company and Employees

With good software, this step is quick:

1. Create the company account.
2. Define work centres (if you have more than one).
3. Configure standard schedules (split shift, continuous, rotating, etc.).
4. Invite employees (usually by email).
5. Each employee downloads the app or accesses the web.

With Cleverfy, this process takes less than 10 minutes for a company of 10 employees.

Step 3: Communicate to the Team

Before starting, inform your employees:

• What they must do: Clock in on entry, exit, and breaks.
• How they must do it: App, web, kiosk… whatever you’ve decided.
• Why: It’s a legal obligation, not a “surveillance system”. Convey that it’s to protect everyone (including employees, who will have a record of their worked hours).
• What happens if they forget to clock in: Define a protocol (notify the manager, manual correction with justification, etc.).

A brief email and a 5-minute explanation in a team meeting is usually enough.

Step 4: Start and Monitor the First Weeks

The first 2-3 weeks are key:

• Review clock entries daily to detect forgotten entries or errors.
• Resolve questions quickly: There will be employees who aren’t sure how to clock breaks or have problems with the app.
• Correct clock entries with traceability: If someone forgets to clock in, correct the record from the admin panel (the system will save the modification with date and reason).
• Don’t be inflexible the first few days. There’s a natural adaptation period.

Step 5: Automate and Forget

Once the team has adopted the system (usually in 1-2 weeks), time tracking runs itself:

• Employees clock in by habit.
• Reports are generated automatically.
• Alerts notify you if someone hasn’t clocked in.
• Data is stored securely in the cloud.

Your work is reduced to periodically reviewing reports and managing occasional incidents.

How Much Does Time Tracking Cost for an SME?

The cost varies greatly depending on the solution chosen. Here’s an indicative comparison for an SME of 10 employees:

More Economical Options (Time Tracking Only)

Software	Monthly cost	Annual cost	3-year cost
Cleverfy (monthly)	15 EUR	180 EUR	540 EUR
Cleverfy (Lifetime Deal)	One-time payment 699 EUR	-	699 EUR total
Kronjop	24 EUR	288 EUR	864 EUR

Options with Complete HR Suite

Software	Monthly cost	Annual cost	3-year cost
Factorial	50 EUR	600 EUR	1,800 EUR
Sesame HR	82.50 EUR (minimum)	990 EUR	2,970 EUR
Personio	~99 EUR (estimated)	~1,188 EUR	~3,564 EUR

The key question is: do you need just time tracking or a complete HR suite?

If you’re an SME of fewer than 30 employees and your main need is clocking and legal compliance, paying 5-8 EUR/user/month for an HR suite that includes features you won’t use (payroll, performance evaluation, recruitment) is like buying a truck to go to the supermarket.

Practical tip: Start with an economical, specialised solution. If your company grows and needs advanced HR features, you can always migrate. Cleverfy lets you start from 1.50 EUR/user/month with no contract or lock-in.

The 7 Most Common Mistakes When Implementing Time Tracking

1. Continuing to Use Excel or Paper

It’s the most serious mistake. Excel won’t meet the new Royal Decree requirements: it has no automatic timestamp, it’s not immutable, it has no modification traceability, and doesn’t allow remote access for the Inspectorate. If the regulations are approved as planned, it’s only a matter of time before you’re penalised.

2. Choosing Software That’s Too Complex

If your employees need a course to learn how to clock in, the software is too complex. A good clocking system should be as easy as unlocking your mobile.

3. Not Recording Breaks

Many SMEs record entry and exit but forget about breaks. The law requires breaks to be reflected. Configure your software so employees clock breaks.

4. Not Having a Contingency Plan

What happens if the system goes down one day? You need a documented alternative procedure. A paper form, a WhatsApp to the manager, or an email with clock time serve as a temporary backup.

5. Implementing Without Communicating

Installing a clocking system without warning the team generates distrust and resistance. Communicate beforehand, explain why, and make clear it’s a legal obligation, not a personal control measure.

6. Not Reviewing Records

Putting in a clocking system and not reviewing it is like installing an alarm without turning it on. Review reports weekly the first few weeks and then at least once a month.

7. Paying Too Much for Features You Won’t Use

You don’t need 5-8 EUR/user/month software if you only need clocking. HR suites are great for medium-large companies with an HR department. For an SME of 10 employees, a tool specialised in time tracking is more efficient and much cheaper.

Time Tracking and Remote Work: What You Need to Know

If your SME has remote workers (total or partial), time tracking has particularities:

Remote Work Does NOT Exempt from Time Recording

Employees working from home must clock in exactly like those going to the office. The difference is they clock from their mobile or computer instead of at a kiosk or terminal.

On-Site/Remote Differentiation

Regulations require distinguishing between on-site and remote days. Your software must allow marking whether clocking is done from the office or from home.

Optional Geolocation

Some companies activate geolocation to verify from where remote workers clock in. It’s legal as long as the employee is informed and the measure is proportional, but it’s not mandatory.

Right to Digital Disconnection

Time recording also protects employees: if the record shows a worker is systematically clocking excessive hours, the company must act. Time tracking is a tool for mutual protection.

Time Tracking by Sector: Particularities for SMEs

Retail

Rotating shifts, part-time employees, irregular schedules. You need software that manages shifts and automatically calculates each employee’s hours, including holidays and weekends.

Hospitality

One of the sectors with most schedule complexity: split shifts, weekend extras, one-off events. App or kiosk clocking at the venue entrance is the most practical option.

Construction and Renovations

Employees at different sites, schedules varying by project. Geolocation clocking from the mobile app lets you know which site each person worked at.

Offices and Professional Services

The simplest case: web or browser extension clocking when starting and finishing the day. If there’s remote work, the employee clocks in the same way from home.

Consultancy and Technical Services

Staff alternating between office, client site, and remote work. The mobile app with option to indicate location or project is the best solution.

Frequently Asked Questions (FAQ)

Are SMEs required to have time tracking?

Yes, all companies in Spain are required, regardless of size. This includes self-employed with employees, 2-person micro-businesses, and 200-worker SMEs. There are no size exemptions.

Can I use Excel for time tracking?

Not as the main system. The 2026 regulations will require digital recording with automatic timestamp and traceability. Excel doesn’t meet these requirements. You can use Excel as a complement or backup, but you need digital clocking software as the main system.

How long does it take to implement a time tracking system?

With modern software like Cleverfy, between 10 and 30 minutes for initial setup. The team’s adaptation period is usually 1-2 weeks until everyone clocks in by habit.

What happens if an employee forgets to clock in?

The administrator can correct the clock entry from the management panel, adding a justification. The system records the modification with complete traceability (who, when, and why it was corrected). The important thing is having a clear protocol for these situations.

Do I need time tracking for part-time employees?

Yes. The obligation applies to all employees, regardless of contract type or working hours. Full-time, part-time, temporary, permanent, internships… everyone must clock in.

How much does time tracking software cost for a small SME?

From 1.50 EUR/user/month with Cleverfy. For a company of 10 employees, that’s 15 EUR/month or 180 EUR/year. There are also Lifetime Deals (one-time payment from 699 EUR) for those who prefer to forget about monthly fees.

Conclusion: Time Tracking Doesn’t Have to Be Complicated or Expensive

Time tracking is a legal obligation, but it doesn’t have to be a headache. With the right software, implementation is fast, cost is minimal, and maintenance is practically zero.

What you need as an SME is:

1. Simple and affordable software that complies with the law.
2. 10 minutes to configure it.
3. Communicate to the team how and why it’s used.
4. Review it periodically to ensure everything works.

You don’t need a 5 EUR/user HR suite if you only need clocking. You don’t need a consultant to implement it. And you don’t need a lock-in contract tying you for a year.

Cleverfy is designed exactly for this: time tracking for Spanish SMEs, from 1.50 EUR/user/month, configured in 10 minutes, and meeting 100% of regulations. No contract or lock-in.

Create your free account and start clocking today, or book a demo if you prefer us to show you in person.