SAP HR Time Data includes: 

Daily working hours
Absences (annual leave, sick leave, long service leave, etc.)
Time-related payments (overtime, meal allowances, shift allowances, etc.)
Absence quotas (accumulations, deductions, and corrections)
Absence quota compensation for unused absence quota balances.

Time Types
Time data (attendances or absences) is stored using time types.
Time types are stored in HR Master Data or created by the Time Evaluation program during time evaluation. They have a 4-digit code assigned to them.
For example: Time-related Payments = Time type 2000 to 2499, Absences = Time type 2500 to 2999

Time Data Recording
To record employee times in SAP R/3 Time Management, such as hours worked, business trips, leave, or substitutions, you can use a variety of systems and methods, such as:

Online by time administrators
Separate time recording systems
Cross-Application Time Sheet (CATS)
Employee Self-Service (ESS) applications, such as Internet Application Components (IACs), Workflow forms, or touch screen systems
Customer(Legacy) systems with an interface to the R/3 System.

Categories of Absences & Attendances
There are 2 categories of absences :

Quota-driven absences
Non quota-driven absences

Quota-driven absences are absences with allocated limits over a set period (such as annual leave).

These absences need to be recorded for legal and/or financial reasons.
Entitlement can be given at the start of the period (e.g. as a total sum for the year), or can be given gradually with the total period being broken up into several smaller portions (as an accrual, e.g. monthly, depending on local practices and regulations).
During the period of validity, deductions can be made to the entitlement balance (which could hold a negative value).
Entitlement balances can be added from one year to the next or replaced by a new value each year.

Non quota-driven absences are absences that do not have periodic limits (such as study leave, bereavement leave and unpaid leave).

Some important Time Management infotypes:

Absences 2001
Attendance 2002
Overtime 2005
Absence Quotas 2006
Attendance Quotas 2007
Time Events 2011

Important Time Transactions
PA51: Display time data
PA53: Display time data
PA61: Maint. Time data
PA62: List entry for additional data
PA63: Maint. time data PA64: Calendar entry