How do I track labor costs by job in construction?
The foundation is time tracking. Every hour worked needs to be recorded and assigned to a specific job as it happens, not reconstructed later. Waiting until the end of the week means relying on memory, which produces inaccurate data. If your crew worked on three jobs Monday, you need to know how many hours went to each one.
Start with a consistent method your crew will actually use. Paper timesheets work if your team fills them out daily and you collect them weekly. Time tracking apps like Busybusy, ClockShark, or ExakTime let workers clock in and out from their phones and assign time to jobs in real time. The method matters less than consistency.
Capture more than just hours. Record the job name or number, the worker’s name, and the type of work performed. This detail lets you analyze labor costs by phase or cost code, not just by job. That’s how you discover that your framing crew is consistently faster than estimated while your finish work always runs over.
Don’t forget burden costs. An employee making $25/hour doesn’t cost you $25/hour. Add employer payroll taxes, workers compensation insurance, and any benefits you provide. A $25/hour employee might actually cost $32-35/hour fully loaded. Use the burdened rate when calculating job costs.
Enter time data into your accounting software weekly. QuickBooks and other construction job costing software let you assign labor costs to specific jobs. If you’re using timesheets, someone needs to enter that data. If you’re using a time tracking app that integrates with QuickBooks, the process is more automated but still needs review.
Reconcile weekly to catch errors. Did someone forget to switch jobs when they moved to a different site? Did hours get assigned to the wrong project? Did overtime calculate correctly? Weekly reconciliation takes 30 minutes. Fixing three months of bad data takes days.
Subcontractor labor is different from employee labor. You’re not tracking their hours. You’re tracking their invoices. When a sub bills you, code that expense to the job. The distinction matters because subs are a job expense rather than payroll, but they’re still labor costs for that project.
The goal is knowing what labor actually cost on each job so you can compare it to your estimate. If you bid 200 hours of labor at $30/hour burdened and the job took 280 hours, you need to know that before you bid the next similar job. A construction bookkeeper in American Fork who understands job costing can help you set up systems that make this tracking manageable rather than overwhelming.
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