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How to Track Labor Costs on Construction Projects

Labor is 40-60% of project cost. If you're not tracking it right, you're flying blind.

Why Labor Tracking Matters​

Without accurate labor tracking:

  • You don't know which jobs are profitable
  • Estimates are based on guesses
  • Problem projects aren't identified early
  • Certified payroll is a nightmare
  • You can't improve productivity

With good labor tracking:

  • Real-time job costing
  • Better estimates on future work
  • Early warning on problem jobs
  • Easier certified payroll
  • Productivity benchmarks

What to Track​

Minimum Fields​

FieldPurpose
EmployeeWho worked
DateWhen they worked
ProjectWhich job
HoursHow many hours
Regular/OTOvertime tracking

Better Tracking (Add These)​

FieldPurpose
Cost codeWhat activity
PhaseProject phase
Start/end timeActual times
Foreman approvalVerification
NotesContext

Cost Code Structure​

A good cost code system is essential. Example structure:

By CSI Division​

03 - Concrete
  03100 - Formwork
  03200 - Reinforcement
  03300 - Cast-in-place
04 - Masonry
  04100 - Mortar and grout
  04200 - Unit masonry

By Activity Type​

01 - General Conditions
02 - Site Work
03 - Demolition
04 - Foundations
05 - Framing
06 - Rough-in (MEP)
07 - Finishes
08 - Punch list

Key principle: Your cost codes should match your estimate structure.

The Paper Method​

Daily Time Sheets​

Each worker completes daily:

  • Name and date
  • Project name/number
  • Start and end time
  • Lunch/breaks
  • Cost code for each activity
  • Foreman signature

Weekly Processing​

  1. Collect all time sheets
  2. Enter into spreadsheet/system
  3. Verify totals with foreman
  4. Process payroll
  5. Post to job cost

Problems with paper:

  • Illegible handwriting
  • Lost sheets
  • End-of-week memory errors
  • Manual data entry
  • Delayed job cost data

The Digital Method​

Mobile Time Entry​

Workers enter time on phone/tablet:

  • Select project and cost code
  • Enter hours or clock in/out
  • Foreman approves digitally
  • Data flows to payroll and job cost

Benefits​

  • Real-time data
  • No manual entry
  • GPS verification (optional)
  • Immediate job cost updates
  • Easier certified payroll

Analyzing Labor Data​

Key Metrics​

MetricFormulaTarget
Cost per hourTotal labor $ / HoursVaries by trade
ProductivityUnits installed / HoursCompare to estimate
UtilizationBillable hours / Total hoursover 85%

Weekly Review​

Every week, compare:

  • Actual hours vs budgeted hours
  • Actual cost vs budgeted cost
  • Earned value vs actual cost

Warning Signs​

  • Hours running ahead of percent complete
  • Cost codes over budget early
  • Overtime trending up
  • Productivity below estimate

Prevailing Wage / Certified Payroll​

If you're on public works, you need:

  • Classification tracking (journeyman/apprentice)
  • Fringe benefit tracking
  • WH-347 report generation
  • Electronic filing (eCPR in California)

See our Certified Payroll Guide →

Tools for Labor Tracking​

Spreadsheets​

  • Free
  • Flexible
  • Manual entry required
  • Good for small crews

Time Clock Apps​

  • Many free/cheap options
  • Clock in/out
  • Basic reporting
  • Limited job costing

BLDR Pro / BLDR Time​

  • Cost code tracking built-in
  • Foreman approval workflow
  • Certified payroll support
  • Real-time job costing
  • Try Free →