Why Labour Lands on Job Costs Weeks Late, and the Fix

Labour lands on job costs weeks late because site time, payroll and accounting move on different clocks. The fix is to capture coded time daily, cost it when earned, then true it up to the approved pay run.

That sounds simple. On a live construction job, it rarely is.

A worker might submit a weekly timesheet on Friday. The supervisor approves it on Monday. Payroll processes it on Wednesday. Finance posts a wage journal at month end. By then, the work could be three weeks old.

The project manager has already made decisions using a margin that was never real.

Where the delay starts

Most late labour costs come from five hand-offs.

Time is captured too late

Paper timesheets and end-of-week mobile entries rely on memory. Workers forget which job they were on, when they changed tasks, or whether travel time belonged to a project.

A supervisor then gets a 45-hour timesheet with one job number. In reality, the employee may have worked across three jobs, attended training and spent half a day in the yard.

Job codes do not match the work

Payroll might know the employee worked 38 ordinary hours and 7 overtime hours. That does not tell the estimator whether those hours went to formwork, excavation, fit-off or rework.

Free-text descriptions create another problem. “Smith St”, “Smith Street” and “Job 1042” can all mean the same project. Accounting software may treat them as separate jobs or reject the entries.

Approval waits for payroll day

Many businesses treat timesheet approval as a payroll task. It should also be a job control task.

If a supervisor only checks time when payroll is due, errors sit untouched for days. Payroll then has a choice: delay the pay run, guess the allocation, or charge everything to a holding code.

The holding code is where labour costs go to hide.

Payroll and job costing use different rules

The site records hours. Payroll calculates money.

That calculation may include overtime, allowances, casual loading, leave, super and adjustments from an earlier period. An EBA or award can also change how a shift is paid.

Under the Building and Construction General On-site Award, the standard casual loading is 25% as at October 2026. If the job report costs a casual at the base hourly rate only, it understates labour before overtime or allowances are considered.

As at October 2026, the super guarantee rate is 12%. It has applied at that rate since 1 July 2025. Super should be costed using the correct ordinary time earnings treatment, not simply added to every dollar paid.

The accounting journal arrives after the work

Some payroll systems send one total wages journal to the general ledger. Finance then splits it by job using a spreadsheet.

That split often happens after payroll, bank reconciliation or month end. The general ledger may be correct eventually, but the job report is late when the project team needs it most.

For more on the full flow from site records to project reporting, see the construction job costing hub.

What late labour does to a job

Late cost is not just an accounts problem. It changes site decisions.

Say a project has recorded $82,000 of revenue and $56,000 of costs. The report shows a $26,000 margin. If another $14,000 of earned labour is waiting in payroll, the real margin is $12,000 before any other missing costs.

The project manager may approve extra hire, miss a variation, or keep using a labour-heavy method because the report looks healthy.

Late data also makes forecasting harder. A sudden wage posting can look like a bad week, even when it covers work completed across the previous fortnight.

The practical fix

You need two labour figures: an earned cost and an approved payroll cost.

The earned cost gives the project team a timely estimate. The approved payroll cost replaces that estimate once payroll is final.

Stage	Common delayed process	Better control
Time capture	Weekly paper or recalled entries	Daily start, finish, break, job and cost code
Site approval	Checked on payroll day	Supervisor reviews exceptions each day
Labour value	Hours multiplied by one base rate	Expected ordinary time, overtime, allowances and on-costs
Payroll posting	One total wages journal	Employee or job-level costing from the approved pay run
Month end	Spreadsheet allocation weeks later	Accrual for earned labour, followed by a payroll true-up
Reconciliation	Finance checks the total only	Payroll totals matched to job costs and clearing accounts

1. Capture time against controlled codes

Give workers a short list of valid jobs and cost codes. Do not ask them to type project names.

Capture start time, finish time, unpaid breaks, job, task and any required allowance trigger. If someone changes jobs during the day, record the change when it happens.

Keep the screen simple. Too many codes lead to guesses.

2. Make supervisors clear exceptions daily

Supervisors do not need to re-enter every timesheet. They need to see what looks wrong.

Useful exceptions include missing breaks, overlapping shifts, inactive job codes, unusually long days, work outside the roster and time charged after a project closed.

Daily approval does not replace payroll review. It gives payroll cleaner source data.

3. Cost labour when it is earned

Post an estimated labour cost each day, or at least each week. Use the worker’s expected pay rules and known on-costs.

Depending on the employee and work, that may include:

• ordinary wages
• overtime and shift penalties
• site, travel or tool allowances
• casual loading
• super on eligible earnings
• workers compensation premium assumptions
• payroll tax where the employer and jurisdiction require it
• leave provisions for permanent employees

Do not use one blanket percentage if it creates a material distortion. An apprentice, casual and salaried supervisor can have very different cost patterns.

4. Replace estimates with payroll actuals

Once payroll is approved, reverse or offset the estimated amount and post the actual cost.

The true-up should preserve the original job and cost code. Otherwise, the estimate sits on the project while the actual wage goes to overhead, doubling the apparent cost.

Corrections from earlier pay periods need their own treatment. Post them back to the original job where practical, or show them clearly as prior-period adjustments.

5. Reconcile three totals

After each pay run, compare:

1. gross wages and relevant on-costs in payroll
2. amounts posted to jobs and overhead codes
3. balances left in labour clearing accounts

The total posted to jobs will not always equal gross wages. Leave, non-project time and some allowances may belong in overhead. The difference should be explainable, not mysterious.

Keep compliance attached to the process

Faster costing must not weaken payroll records.

As at October 2026, Fair Work employee records generally need to be kept for 7 years. Time and wage records should be legible, in English and available for inspection when required.

As at October 2026, an employee must generally receive a pay slip within 1 working day of being paid. A job cost entry is not a pay slip and does not replace one.

As at October 2026, there is no $450 monthly earnings threshold for super guarantee eligibility. That threshold was removed from 1 July 2022. Other eligibility rules still matter, including special rules for employees under 18.

Good job costing keeps the source record, approval history, pay calculation and accounting entry connected. That gives payroll the evidence it needs and gives the project manager a number worth using.

Start with one pay cycle

Pick one crew and one active project. Capture coded time daily. Post earned labour during the week. Then compare the estimate with the approved payroll result.

Look at where the variance came from. It will usually be overtime, allowances, wrong codes, missed breaks, leave or late approvals.

Fix those causes before rolling the process across every project.

You can also use the Crew Time pricing calculator to compare the system cost with the admin time, delayed reporting and job margin errors in your current process.

The aim is not to make the estimate perfect. It is to make labour visible while there is still time to act, then replace the estimate with payroll truth.