An apparatus and method for timestamping data packets are provided. The apparatus includes an input bit counter responsive to input bits entering a physical layer (PHY) device and an output bit counter responsive to output bits transmitted by the PHY device. A timestamp for an incoming bit is calculated based on a number of bits awaiting transmission by the PHY device at the time of arrival of the incoming bit. The number of bits awaiting transmission by the PHY device is determined based on the first count and the second count.