How can I calculate the cost of normal working hours and overtime?. A comprehensive guide for calculating time worked on construction projects, with examples of overtime calculations. Tables to calculate labor times for a construction project. Weekly hour’s calculator.
How to Calculate Work Hours?
The process of measuring the consumption of man-hours or fraction of labor hour that is necessary to perform a task; requires defining the conditions within which we accomplish the measuring.
The above ensures that duplication can support the measure.
They are defined as standard requirements.
We note that times of labor required to complete a task include both actual and normal non-contributory time.
Calculation of man Hours Cost for Construction Projects – Standard Conditions
Standard Conditions. The total working hours calculated using the records in the tables are only valid if we execute the project under conditions similar to those existing at the time, we made the performance measurements.
As each project differs from another, we need to adjust the total count of work hours of the mathematical calculation, with factors that consider the influence of the particular conditions prevailing in each project.
Summarizing:
First, the estimating team must have reliable records of the number of man-hours required to complete each task.
Next, knowing the number and type of tasks to be performed on the project, we mathematically calculate the number of man-hours.
This is calculated by applying the performance recorded in the tables to each task.
Furthermore, estimators or their advisers must have complete information on the conditions under which we will carry out each project.
The proponent needs the above estimate to fit the mathematical calculation.
Features of project cost management
Features of project cost management. We obtain basic information on the features of project cost management for:
- The tender documents.
- The information gathered during the site visit.
- The consultations to the purchaser.
Then, in the next step, we must define the correction factors that we will apply to the total count of work hours of job calculated mathematically.
We then assess the direct hours of labor required for each specialty and with the data for the times of job, we obtain the number of workers required.
In short, for this task, the estimator relies on the drawings, the calculation of materials, the tables with performance records, and especially on his experience and the contribution of the specialists.
In general, each contractor has already established the man-hours cost for the normal time of each worker category.
This cost varies depending on their specialty and includes labor clothing, safety features and a toolbox, where applicable.
How to Calculate Work Hours – Overtime
Overtime. Additional work results in a significant increase in the direct man-hours cost for workers. We have to consider that in the estimation.
Working overtime is gratifying for the worker, but we should note that the payment by the hour with a 50% surcharge does not increase the worker’s output by 50%.
On the contrary, the excessive length of the working day diminishes the average performance of the worker.
We find that the difference between hourly costs and performance is even more noticeable when the time is paid 100%.
Despite the above, in the construction industry, firms typically work more than 8 hours a day from Monday to Saturday.
In addition, they may work with all or part of their employees on Sundays and holidays.
Reasons for working extra hours – Calculate time worked
Reasons to work extended hours – Calculate time worked. We should note it that the employer plans to carry out the job with extended working time, mainly for two reasons:
First, to offer attractive salary compensation to the worker, considering that he has only assured his work continuity of that work and that in addition, the place of job is frequently far from his home.
Second, to balance the decrease in actual working hours every day due to operational issues such as.
- To counteract the time lost due to the daily mobilization and demobilization of the worker with his tools from workshop to site.
- The site is often away from the workshop or possibly above the ground, etc.
- To compensate for downtime, work permits are approved, etc.
Other situations which lead to an extended working day are:
- Works with very short turnaround times and high penalties for noncompliance.
- Restoration or extension of existing job facilities with urgent turnaround times (generally in architectural and civil works)
- Work done with specialized staff that is not plentiful in the labor market, etc.
A picture of workers receiving their wages
Photo of workers in receipt of their wages. The following image shows a group of workers waiting to collect their paycheck.
We should note that each country has its labor legislation which, among other things, defines the following issues:
- What is the count of work hours per week that the employer normally has to pay under the local labor law?
- What is the maximum number of authorized overtime hours per day, month and year?
- When do people pay 50% and 100% overtime?
It should be noted that, regardless of labor legislation regulates what, it is usually the approved collective labor agreements of the trade unions that ultimately define how many hours are worked per week and how overtime is paid.
The conditions laid down in these agreements must meet the condition that they are more favorable to the worker than national legislation provides.
Working Hours Calculator in Construction Projects
Overtime Calculator
Overtime Calculator. How overtime affects the man-hours cost. Weekly hours’ calculator.
Calculation of Work Hours- Hypothetical Calculation of the Impact of Overtime
Hours Paid Weekly—Weekly Hours Calculator
Hours Paid Weekly—Weekly Hours Calculator. Assumptions for weekly hours’ calculator:
- Weekly Hours Calculator. We assume that in the area known as X, the maximum number of standard hours per week is 40.
- Weekly Hours Calculator. Overtime, at 50%, is paid for each hour that exceeds the normal hours of Monday to Friday and Saturday until 1 p.m.
- Weekly Hours Calculator. Hours worked on Saturdays after 13:00, Sundays and public holidays pay 100%.
The percentage by which the incidence of overtime increases at cost of the hour arises from the ratio of the cost of hours paid over the hours worked per week, multiplied by 100.
Therefore, if the workday starts at 8am., and we work 10 hours Monday through Saturday, we have:
Weekly Hours Calculator:
- 1) From Monday to Friday, we work 10 hours per day for a total of 50 hours.
- 2) This is 10 hours more than the normal 40 hours, so we paid at 50% that are 15 hours converted to normal, (we assumed that the normal maximum count of work hours per week is 40).
- 3) In Saturday work 10 hours, of which 5 we paid until 1 pm with a 50% surcharge, and we must pay the remaining 5 hours with a 100% surcharge that is, 17.5 hours converted to normal.
- Total time paid: (sum of points 1 to 3), equals 40 + 15 + 17.5 = 72.5 hours.
Weekly Hours Calculator
Monday to Saturday = 10 hours * 6 days equals 60 hours worked.
The percentage increase in the man-hours cost of workers is:
[72.5/60] * 100 = 20.83%
The extra cost for overtime work is 20.83 percent.
This is a significant addition to be considered and should be reported to the company’s accounting officer, who will set the direct labor cost for this project.
Read the following article about how to reliably assess the equipment chosen for project cost management.
Check the next post How to calculate direct hours worked.
How to Calculate Work Hours – Overtime work
