Time theft impacts small businesses, costing U.S. employers over $11 billion annually. Learn how to mitigate losses effectively.

In 2025, time theft continues to burden small businesses significantly, leading to over $11 billion in losses annually. With nearly half of employees admitting to this costly practice, understanding and tackling time theft is crucial for small business resilience and financial health.

What Is Time Theft and How Prevalent Is It?

Time theft is a critical issue affecting businesses, defined as any action where employees are paid for work not performed. This includes padding hours on timecards, taking unauthorized breaks, and conducting personal tasks during work hours. According to a Time Theft study by TimingApp (2025), between 43% and 49% of employees admit to such practices, with an average of 4.5 unworked hours added weekly per worker. Financial losses from time theft are estimated to exceed $11 billion annually in the U.S., underscoring the significance of this issue for small businesses (Prestige PEO, 2025). For example, padding just 10 extra minutes daily can result in approximately $1,200 lost per employee each year.

How Does Time Theft Affect Small Businesses?

The repercussions of time theft extend beyond financial losses, affecting revenue streams and profit margins. Research by Fingercheck (2025) illustrates how lost work hours equate directly to decreased revenue, causing financial strain on small businesses already operating within tight margins. Additionally, time theft compounds operational challenges by increasing the burden on managerial roles and exacerbating resource allocation issues. Beyond the bottom line, this unethical practice undermines trust within the workplace, negatively impacting morale and team dynamics.

What Are the Common Types of Time Theft?

Small businesses frequently encounter several forms of time theft:

• Timecard padding: Employees inflate work hours on their timesheets.
• Buddy punching: Employees punch in or out for colleagues, costing U.S. businesses approximately $373 million annually (Business.com, 2025).
• Extended breaks: Unauthorized lengthening of breaks not accounted for in paid working hours.

The trend toward remote and hybrid work models has further complicated monitoring issues, introducing more opportunities for distraction and untracked hours.

How Can Time Theft Be Reduced with Technology?

Implementing technology can significantly mitigate time theft. Automated time-tracking systems have been shown to reduce instances of theft and improve productivity by 47%, as noted in WorkStatus’s 2025 report. The software market for these tools is robust, with the time-tracking segment valued at $5.23 billion in 2025 and expected to grow strongly (Tivazo, 2025). By adopting these technologies, businesses can enhance productivity and substantially recover lost revenue.

FAQ

1. What specific policies can help prevent time theft in small businesses?
   Instituting clear policies on time-tracking expectations and regular audits can deter time theft.

   
   

2. How does buddy punching contribute to time theft costs?
   Buddy punching can result in significant financial losses, costing U.S. businesses approximately $373 million annually.

   
   

3. Are there industry-specific time theft statistics available for 2025?
   Detailed statistics can vary by industry; resources such as TimingApp (2025) may provide more specific breakdowns.

   
   

4. What role does employee trust play in mitigating time theft?
   Building trust reduces the likelihood of time theft, fostering a culture of accountability and integrity.

   
   

5. How is the time-tracking software market expected to grow by 2030?
   Current growth trends suggest a sustained increase, driven by a shift to remote work models and technological integration.

   
   

Sources

• TimingApp (2025). “How Time Theft Affects Small Businesses.” — Supports prevalence statistics.
• Prestige PEO (2025). “Workplace Time Theft Impacts.” — Provides financial loss data.
• Fingercheck (2025). “The Billion-Dollar Leak: How Time Theft Affects Profits.” — Explains operational strain.
• Business.com (2025). “Workplace Theft Study Statistics.” — Details on types and costs of time theft.
• WorkStatus (2025). “Productivity Improvements with Time Tracking.” — Covers technological solutions.
• Tivazo (2025). “Time Tracking Market Trends and Compliance Insights.” — Discusses market size and growth projections.

Closing Thoughts

Time theft remains a significant challenge for small businesses in 2025, costing billions in lost productivity. Implementing automated tracking systems can help mitigate this issue effectively. Consider adopting technology solutions to enhance workforce productivity and recover lost revenue.