Our staff take an hour's break. Do they clock out and back in again?

Either works, but the tidy way is to stay clocked in and put the break on the stretch. A break here is a number of minutes taken off the worked total, not a second clocking. A manager opens the row on Reports → Hours worked, presses Correct, types the Break minutes and saves. If they clock out and in again instead, the report shows two stretches for the day and both are counted, which is also fine. Up to 600 minutes can be entered on one stretch.