Software for contractors to track job costs and timesheets links each approved hour to a job. It prices that hour at a loaded labour rate and adds materials and equipment. You see live job profit, not a month-end surprise.
Most contractors already record hours somewhere. The trouble starts when those hours sit in a payroll app, receipts sit in a shoebox and the estimate sits in a spreadsheet. This guide shows how the pieces fit together, works through one job in full and helps you pick the right type of software.
Quick Answer
What software do contractors use to track job costs and timesheets? They use one of four types. These are field time-clock apps, accounting software with job tracking, construction ERP suites, or a time, expense and billing tool. The right choice depends on crew size and how you bill. Whichever you pick, it must do four things:
- Record hours against a job (and ideally a task or phase), not just against a person.
- Price those hours at a loaded cost rate, meaning wages plus taxes, insurance and benefits.
- Hold materials, equipment and subcontract costs against the same job.
- Route timesheets through approval before they reach payroll or an invoice.
What is job costing for contractors?
Job costing is the practice of recording every cost a job incurs and comparing it with what the job earns. Each job becomes its own small profit and loss account. Firm-wide accounts can show a profitable year while three individual jobs quietly lost money.
Contractors usually group job costs into five buckets:
| Cost type | What goes in it | Where it usually comes from |
|---|---|---|
| Direct labour | Crew hours × loaded cost rate | Timesheets |
| Materials | Wire, fixtures, timber, consumables | Supplier invoices and receipts |
| Equipment | Hire charges, fuel, owned-plant hourly rates | Hire invoices, equipment logs |
| Subcontractors | Specialist trades on the job | Subcontractor invoices |
| Overhead allocation | Office, vehicles, insurance not tied to one job | Accounting, allocated by rule |
Labour is the bucket that varies most and is hardest to capture. Materials arrive with an invoice. Labour arrives only if someone records it, against the right job, on the right day. That is why timesheets and job costing belong in the same system.
Why do timesheets and job costs need to live together?
A timesheet that only says “Dave, 9 hours, Tuesday” pays Dave correctly. It tells you nothing about which job those hours ate into. Job-coded timesheets turn the same nine hours into a cost line on a specific job.
Three things go wrong when they are split:
- Labour lands on the wrong job. Crews moving between sites log a whole day to the first job they visited.
- Costs show up weeks late. If hours are only coded at payroll time, a job can be 30% over before anyone sees it.
- Billable time leaks. On time and materials (T&M) work, unrecorded hours are unbilled revenue, not just a costing error.
A contractor timesheet approval workflow fixes much of this. A supervisor checks each week’s hours against the job before they are locked for payroll and billing.
How do you calculate a loaded labour cost rate?
A loaded labour cost rate is the hourly wage plus the employer’s extra costs per hour worked. These include payroll taxes, workers’ compensation, insurance, paid leave and retirement contributions. Job costing on bare wages makes every job look more profitable than it is.
The gap is large. According to the US Bureau of Labor Statistics, construction employers paid $36.13 an hour in wages and $15.84 in benefits in June 2026. The figures come from its Employer Costs for Employee Compensation release (checked 22 October 2026). Benefits added roughly 44% on top of wages.
Loaded cost rate = Hourly wage × (1 + burden %)
Example: $42.00 × 1.44 = $60.48 per hourYour own burden will differ with trade, state, union agreements and insurance class. Work it out once a year from payroll records, then store it as each person’s cost rate in your software.
What does job costing look like on a real job?
Here is an illustrative T&M job for a small electrical contractor: a retail unit rewire. Three people worked on it over two weeks. All hours come from approved timesheets, and cost rates use the 44% burden above.
| Person | Approved hours | Wage | Loaded cost rate | Labour cost | Billing rate | Billed labour |
|---|---|---|---|---|---|---|
| Lead electrician | 38 | $42.00 | $60.48 | $2,298.24 | $105 | $3,990.00 |
| Electrician | 52 | $34.00 | $48.96 | $2,545.92 | $90 | $4,680.00 |
| Apprentice | 46 | $20.00 | $28.80 | $1,324.80 | $60 | $2,760.00 |
| Labour total | 136 | $6,168.96 | $11,430.00 |
Now add the non-labour costs:
| Line | Cost | Billed | Note |
|---|---|---|---|
| Materials | $4,200.00 | $4,830.00 | 15% markup on supplier cost |
| Scissor lift hire | $650.00 | $650.00 | Passed through at cost |
| Job total | $11,018.96 | $16,910.00 |
The job made $5,891.04 gross profit, a 34.8% margin. Here is what the same job looks like when it is costed on bare wages instead:
| Costing method | Labour cost | Total job cost | Gross margin |
|---|---|---|---|
| Bare wages | $4,284.00 | $9,134.00 | 46.0% |
| Loaded cost rates | $6,168.96 | $11,018.96 | 34.8% |
The wage-only figure overstates margin by more than 11 points. Quote the next job from that number and you will price it too low. You can check any job’s split with the free margin calculator.
What would budget tracking have caught?
The estimate allowed 120 labour hours. The crew used 136, about 13% over. With an alert at 80% of the hours budget, the warning would have fired at 96 hours. That still left time to raise a variation with the client or adjust the crew.
Missing timesheets are the other leak. If the apprentice’s last 12 hours had not been submitted before invoicing, $720 of billable labour would have been left off the bill.
How does construction project cost tracking improve profitability?
Construction project cost tracking improves profitability by showing overruns while they can still be fixed. It also feeds real numbers back into the next estimate. Profit is protected in three places:
- During the job. Budget-versus-actual by job and phase shows when labour is running ahead of progress. You can raise a change order before the extra work becomes free work.
- At billing. On T&M and cost-plus jobs, every approved hour and receipt becomes an invoice line. Nothing depends on someone’s memory at month end.
- At the next quote. Actual hours per task from finished jobs replace guesses. If rewiring a unit of this size always takes 136 hours, stop quoting 120.
The same logic applies to any project business. The guide on how to calculate project profitability covers the wider method, including how to allocate overhead.
Which type of software fits your contracting business?
There is no single best tool for every contractor. Match the software type to how your crews work and how you bill.
| Software type | Strongest at | Weaker at | Best fit |
|---|---|---|---|
| Field time-clock app | GPS clock-in, geofencing, crew entry, offline use | Materials, budgets, invoicing | Larger crews spread across many sites |
| Accounting software with job tracking | Supplier bills, payroll, job profit reports | Daily timesheet capture and approval | Owner-run firms where the bookkeeper drives costing |
| Construction ERP or job-costing suite | Cost codes, committed costs, retentions, certified payroll | Cost and setup time for small teams | General contractors on larger commercial work |
| Time, expense and billing tool | Job-coded timesheets, approvals, expenses, budgets, invoices | GPS and site attendance | Specialist and service contractors billing T&M |
Two questions settle most decisions. First, do you need to prove where someone was, or only which job they worked on? Location proof points to a field app, covered in our time tracking for contractors guide. Second, do you bill by time and materials or by fixed price? T&M billing rewards tools that turn approved time and receipts straight into invoices.
Many firms combine two types. A common pairing is a time and billing tool for job-coded hours and invoices, synced to accounting software for payroll and the ledger. If an outside accountant handles your books, see how accountants evaluate time tracking software before you choose.
What should construction timesheet software include?
Use this checklist when you trial any construction timesheet software or construction timesheet app:
- Mobile time tracking, so hours are logged on site on the day, not reconstructed on Friday.
- Job and task codes on every entry, with a clear billable or non-billable flag.
- Approvals by a supervisor or project manager before hours reach payroll or invoices.
- Per-person cost rates and billing rates, dated so rate changes don’t rewrite old jobs.
- Expenses with receipt photos against the same job.
- Budget alerts on hours or fees per job.
- Export or sync to your accounting software.
For crews on large sites who also need geofenced attendance, compare dedicated construction time tracking software. For firms managing outside trades, see subcontractor time tracking.
How does electrical contractor time and material billing work?
Electrical contractor time and material billing charges the client for approved labour hours at agreed rates, plus materials at cost or with a markup. The contract normally sets the rates, the markup and what counts as billable. Travel, call-outs and minimum charges are common sticking points, so define them up front.
Three habits keep T&M invoices defensible:
- Record hours against the job daily, with a short note on the work done.
- Attach a receipt to every material and hire line, so the client can see the source cost.
- Approve before you invoice. A supervisor review catches double-logged days and personal time.
The same approach works for plumbers, HVAC engineers and other trades billing T&M. To produce the invoice itself, the construction invoice template is a quick starting point.
Where does Keito fit?
Keito is a time, expense and billing tool. It suits contractors who bill by the hour or on T&M and want job costs and invoices in one place. It does not offer GPS or geofenced clock-in. If you need location proof, pair it with a field app or choose one.
What it does cover:
- Job-coded time by client, project and task, from the iOS app, desktop apps or browser.
- Cost rates and billing rates per person. New entries snapshot the rate, so later changes don’t rewrite past jobs.
- Expenses with receipt photos, billable or not, on the same project.
- Project budgets by hours, fees, task or person, with an alert threshold (80% by default). Fee budgets can include expenses. See the budgets docs.
- Timesheet and expense approvals on Pro and Business plans, before time reaches an invoice.
- Invoices from approved time and expenses, plus a QuickBooks Online or Xero connection on Business.
The project report shows hours, billable value, internal cost, invoiced and uninvoiced value for each job. Plans and limits are on the pricing page.
Key Takeaway
Job costing only works when approved, job-coded hours are priced at loaded cost rates. Wage-only costing can overstate job margin by more than ten points.
Track job costs from the hours your crew actually worked
Keito turns job-coded timesheets, receipts and budgets into project profit and invoices you can defend.
Frequently Asked Questions
What is the best software for contractors to track job costs and timesheets?
The best software depends on crew size and how you bill. Large crews across many sites usually need a field time-clock app with GPS. Specialist and service contractors billing time and materials do well with a time, expense and billing tool synced to accounting software.
How do contractors track labour costs per job?
They record every hour against a job on a timesheet, approve it, then multiply it by each person’s loaded cost rate. The loaded rate adds payroll taxes, insurance and benefits to the wage. Summing those lines per job gives true labour cost.
What is a loaded labour rate in construction?
A loaded labour rate is the hourly wage plus the employer’s extra costs per hour, such as payroll taxes, workers’ compensation, insurance and benefits. US Bureau of Labor Statistics data for June 2026 put construction benefits at about 44% on top of wages.
Can I use the same timesheet for payroll and job costing?
Yes, and you should. One approved, job-coded timesheet can feed payroll, job costing and client invoices. Keeping separate records for each creates mismatches that are hard to reconcile later.
How often should contractors review job costs?
Review active jobs at least weekly, when timesheets are approved. Weekly reviews catch labour overruns while you can still raise a change order. Monthly reviews usually find the problem after the money is gone.
Do construction timesheet apps need GPS?
Only if you must prove where someone worked. GPS and geofencing help with attendance disputes and multi-site crews. For job costing and T&M billing, accurate job codes and approvals matter more than location.