The Ultimate Guide to Construction Time Tracking

Accurate time tracking is foundational to construction project success. When labor hours aren’t recorded correctly, the ripple effects touch every aspect of operations — from payroll accuracy to project profitability.

Manual methods like paper timesheets rely on worker memory and create inconsistencies in how hours are documented. These gaps lead to payroll errors, compliance risks and budget overruns that frustrate project managers and erode profit margins.

Research shows that U.S. employers correct errors on nearly 80% of submitted timesheets — a clear indicator that traditional approaches often fall short. This level of correction highlights a systemic need for process improvement — not just in addressing individual errors, but in implementing tracking methods that prevent inaccuracies from occurring in the first place.

This guide explores effective time tracking practices for construction, from understanding different methodologies to implementing systems that improve accuracy and accountability across jobsites.

Key Takeaways:

• Effective time tracking improves labor hour accuracy, helping construction teams manage jobsites more efficiently
• Digital time tracking methods can significantly reduce time theft, which costs the construction industry millions annually
• Time tracking serves multiple business functions: project management, budgeting and labor law compliance
• Mobile-based time tracking offers flexibility and precision for field workers, capturing accurate clock-in and clock-out times regardless of location
• Successful implementation requires employee involvement throughout the feedback and assessment process

What is Time Tracking?

Construction time tracking records employee labor hours by task, project and cost code to ensure accurate pay, compliance, and project costing. Recording a crew’s working hours by tracking their clock-ins and clock-outs ensures that employees are compensated accurately for their time.

For better construction jobsite management, time tracking helps to increase worker accountability and estimate labor costs for projects with greater accuracy.

Another big impact time tracking has on construction businesses is by providing accurate data on how labor resources are allocated across a project, how much time is spent on specific tasks and overall workforce productivity.

Why is Time Tracking Important?

Construction companies use time tracking to prevent time theft, control labor costs and protect profit margins across jobsites.

Without a time tracking system in place to accurately collect labor hours, construction companies can fall victim to time theft.

Time theft in construction refers to when employees are paid for hours they don’t fully dedicate to work. Whether it’s arriving late, leaving early, taking unauthorized breaks or engaging in personal activities on company time, these practices can lead to severe cost overruns.

This theft issue significantly impacts construction contractors financially and operationally because time theft causes inaccurate time data. This can lead to expensive discrepancies that cost contractors millions annually.

While there is no definitive number to associate with that annual cost, the available research indicates:

• Over $400 billion per year is lost to worker time theft across all industries, according to a report in the Boston Globe and Denver Post
• The American Society of Employers estimated that 20% of every dollar earned by U.S. companies is lost to employee time theft
• A study by Intuit specifically focused on the construction industry found that 49% of employees admitted to inflating their hours. This translates to an average of 4.5 hours stolen per employee per pay period

Beyond direct monetary losses, construction companies also suffer from:

• Project delays and missed deadlines as lost work hours directly impact construction project schedules, potentially leading to contractual penalties and lost revenue
• Decreased productivity because an ineffective workforce affects overall output and project profitability
• Reduced employee morale and engagement due to a lack of trust and fair compensation can negatively impact employee performance

Fighting this challenge requires a time tracking system that maintains accuracy and promotes transparency amongst workers.

Although buddy punching and payroll padding can result from any method of time tracking, digital time tracking approaches can help reduce these issues by improving accuracy and accountability.

What Is Time Tracking’s Impact?  

Time tracking can serve as a strategic tool that allows construction professionals to make more informed decisions. While it helps improve labor hours accuracy in construction, time tracking also:

• Impacts project management
• Maintains accurate budgeting
• Helps keep compliance with labor regulations

These areas are often where the differences between manual and digital time tracking approaches become most apparent.

Project Management

By tracking the time spent on different tasks, construction managers have access to accurate data on labor hours.

This data can help construction managers optimize resource allocation as they assign the right number of workers to specific jobs, ensuring that labor resources are used efficiently and that projects stay on schedule.

Project scheduling and timeline management are also impacted by accurate time tracking. Project managers can use historical time data from previous projects to create realistic timelines for future projects, helping them plan and coordinate tasks more effectively.

Time tracking can serve as a form of documentation for project tasks because it provides a detailed record of when tasks were performed, by whom and how much time was spent. This documentation is extremely valuable for audits, project reviews and future project planning.

Budgeting

Construction companies can use time tracking data to identify areas where costs can be controlled or reduced. Identifying potential risks and possible project delays early in a project helps to mitigate cost overruns.

By monitoring and analyzing time data, project managers can take proactive measures to address issues before they escalate.

Time tracking software for construction also has an impact on project scheduling and budgeting. Most contractors choose to bill clients based on time worked and materials used. Accurate time tracking is required for this type of invoicing as it ensures that clients are billed correctly for the actual hours worked on a project.

Using a mobile time tracking app allows users to generate financial reports based on the time data, which provides a comprehensive overview of labor costs, increasing accuracy in payroll management for construction companies.

These reports allow construction managers to view labor costs against project revenues to assess project profitability and identify areas for improvement.

Compliance With Labor Laws

Accurate time tracking supports labor law compliance by documenting hours worked, overtime and worker classifications for audits and certified payroll reporting.

For contractors working on government-funded projects, time tracking is critical for certified payroll reporting requirements mandated by the Department of Labor. These reports verify that workers receive prevailing wages and proper classifications.

Because construction projects often involve overtime work, using time tracking helps monitor and manage overtime hours. It also allows for better planning to minimize the costs associated with excessive overtime.

What Are the Different Time Tracking Methods?

Construction companies use a range of time tracking methods, but digital tools consistently outperform manual systems in accuracy, efficiency and scalability.

Paper Timesheets

Paper timesheets remain common, but they rely heavily on worker memory and manual entry, two major sources of payroll inaccuracy. Employees fill out paper forms, and these sheets are submitted for approval and processing.

Manual Punch Clocks

Manual punch clocks, also known as time clocks, are physical devices where employees insert a paper card or use a key to “punch in” and “punch out.” The time data is then manually transferred for payroll processing.

Excel Spreadsheets

Some construction companies use Excel or other spreadsheet software for time tracking. Employees enter their hours and details into a spreadsheet, which is then compiled and analyzed by supervisors or administrators.

Spreadsheets allow time entry and analysis, but they lack mobile access, centralized data control and integration with construction payroll systems.

Mobile Time Tracking Apps

Mobile time tracking apps allow construction workers to use their smartphones or tablets to log their working hours, breaks and tasks.

Time Tracking Software

Time tracking software allows employees to log their hours via a web-based platform. This cloud-based method is accessible from any device with an internet connection.

Cloud-based time tracking software improves workforce accountability, streamlines job costing and supports compliance with labor laws across all projects.

A 2023 survey by Capterra found that 70% of respondents in the construction industry use time tracking software, with mobile apps being the preferred method for 63% of them.

Check out our comparison between construction time tracking apps and paper timesheets, and how time tracking software can help improve your construction business.

To better understand the most popular time tracking options, we’ve broken them down in greater detail.

The Limits of Manual Time Tracking in Construction

While manual methods like paper timesheets and punch clocks have been construction industry staples for decades, they present several challenges that can impact both accuracy and efficiency.

Manual time tracking is prone to human error. Workers forget exact start and end times on busy jobsites, handwriting becomes illegible during payroll processing and these small inaccuracies compound into significant payroll discrepancies over time.

Paper-based systems create a substantial administrative burden. Collecting, organizing and entering timesheet data manually consumes valuable hours that project managers and administrative staff could spend on higher-value activities. The delay between when hours are worked and when they’re processed can slow down project cost tracking and decision-making.

Manual methods lack accountability features. Without location verification or timestamping, confirming that employees were on-site during reported hours becomes difficult, enabling time theft practices like buddy punching, where one worker clocks in for an absent colleague.

Finally, manual tracking lacks real-time visibility. Project managers can’t see current labor allocation or identify staffing issues until timesheets are collected and processed — often days after the fact, preventing proactive cost control.

These limitations have driven many contractors toward digital time tracking approaches like WorkMax TIME, which addresses these accuracy, efficiency and accountability challenges across jobsites.

Understanding Digital Time Tracking

Digital time tracking uses technology to record and monitor employee work hours across construction projects.

These systems help construction companies track labor costs, bill clients accurately based on time spent on specific tasks, and monitor workforce productivity and resource allocation.

Types of Digital Time Tracking

There are various digital time tracking approaches available, each with different methods for capturing hours. Some require employees to manually start and stop timers or log their hours worked.

Other systems use GPS or location tracking to monitor when employees arrive on the jobsite and leave.

It’s worth noting that time tracking systems focus specifically on capturing labor hours, while attendance tracking systems monitor absences and presence. These serve different but complementary purposes in workforce management.

Mobile Time Tracking Benefits

Mobile time tracking uses smartphones and tablets to capture working hours in the field. This approach provides several advantages for construction operations:

• Task-specific tracking: Associate time entries with specific tasks, projects or cost codes, providing real-time visibility into labor allocation and project progress
• Location verification: GPS features confirm employees are at designated work sites during clock-ins, creating an audit trail and reducing time theft
• Offline functionality: Time entries can be recorded without internet connectivity and automatically sync when connection is restored — essential for remote jobsites
• Identity verification: Biometric authentication, like fingerprint or facial recognition, ensures the correct employee is clocking in
• System integration: Direct connections to payroll and project management systems eliminate double-entry and reduce errors

How Do You Implement a Time Tracking System?

Implementing a time-tracking system will take time, but it can simplify the rollout of timecards.

Although the process can vary depending on the size of the construction company, we created a general guide to successfully implementing a time tracking system:

1. Identify Key Features

Assess the specific needs and challenges of your construction company. Consider factors such as the number of employees you have, the nature of your projects and your existing time tracking methods.

Consider the must-have features that are necessary to your time tracking system, such as:

• Mobile compatibility: Make sure employees have the capacity to use the app
• Offline capabilities: If your jobsite doesn’t have a good Wi-Fi connection, this would be important to consider
• GPS tracking: Setting up a GPS location for employees entering and exiting the jobsite
• Integrations with payroll and project management software: Analyze if you need the system to integrate seamlessly with your payroll and current project management solution

Be sure to involve employees in the selection process. Seeking their input can ensure employees will be willing to buy in and can help address concerns early on.

2. Test and Refine

Before you officially adopt a time tracking system, test it with a pilot program.

Consider implementing the pilot program in a smaller segment of the workforce or on a specific project before rolling out timecards company-wide.

• Testing the system with a small group of employees can help identify any potential challenges and adjust before full rollout
• Collect feedback from the users to make improvements to the system and the implementation process

3. Train Your Team

Provide comprehensive training to employees on how to use the chosen time tracking system.

Offering support, training sessions and a helpdesk to assist field teams with any issues they may encounter can help ease the implementation process.

• Develop and communicate a clear time tracking policy to all employees. This includes guidelines on clocking in and out, recording breaks and any specific requirements related to the chosen time tracking system
• Provide comprehensive training resources about the system features, timecard submission procedures and data privacy policies
• Help employees by offering ongoing support, be available to answer questions and troubleshoot issues as they arise

4. Plan the Rollout

Once the pilot program is successful, you have made any necessary adjustments from training, you can proceed with the full rollout of timecards across the entire construction company.

Be sure to continuously communicate the official launch with employees and provide them with ongoing support.

• Define your goals and objectives before implementing the pilot program. What specific benefits do you aim to achieve (e.g., improved payroll accuracy, better project insights, reduced time theft)?
• It can help to identify key stakeholders prior to implementation. Project managers, supervisors, payroll staff and employees should all be involved in the process.
• To keep everyone in the company informed, develop a communication plan. Explain the benefits of the system, address any concerns and provide clear instructions for all users.
• Once the pilot is successful, set a timeline for implementation, training and adjustment.

5. Monitor and Evaluate:

After official implementation, be sure to continuously monitor the system. Getting feedback from employees can be extremely valuable for addressing issues that may arise.

Because the time tracking process is ever-changing, there may be a need to regularly assess the effectiveness of the system and adjust if needed.

• Use the time tracking system to track key metrics. Measure the impact of the system on payroll accuracy, project costs, employee productivity and employee engagement as it is implemented.
  • In your analysis, look specifically for how much you’ve started to save on costs, the thoroughness of your audit trail and the time saved on running payroll.
• Identify areas for improvement, use data insights to refine processes and optimize system usage so you can be sure it is the right fit for you.

Additional Tips

• Incentivized adoption is a beneficial way to get employees on board quickly. You can do this by offering rewards or recognition for employees who consistently use the system correctly.
• Time tracking systems are helpful when used properly. Continue to enforce accountability by establishing clear policies and consequences for timecard inaccuracies or misuse.
• The program may not be successful right out of the gate so give the new system some time. Setting an appropriate acclimation period allows field workers to settle into a routine using the system.

Evaluating Your Current Approach

Before selecting a time tracking solution, assess where your current approach falls short:

• How often do you correct timesheet errors?
• Historically, how precise are your cost projections?
• Where are the consistent inaccuracies?

Whether adopting digital time tracking for the first time or upgrading an existing system, focus on solutions that directly solve these specific problems. Define success metrics before implementation and track them consistently to confirm the system delivers measurable improvements.

If you’re ready to see how our software can help you, book a demo with our construction time tracking software experts today!