The labour payment claim mistakes your accounts team misses

Your crew worked a long day. The timesheet lands on someone's desk in the office — diligent, careful, good with a spreadsheet — and they draft the labour payment claim for this month. Hours in, rate across, total at the bottom. Submitted.

It looks right. It adds up. And it's quietly wrong, because a labour claim isn't a timesheet times a rate. It's an award calculation, and the award has rules that a spreadsheet doesn't know about.

Nobody showed your accounts team the Building and Construction General On-site Award. So month after month the same handful of labour payment claim mistakes leak through — each one small on a single line, each one stacking across a crew, a month, a job. Here's where the money goes.

Mistake 1: deducting unpaid hours off overtime instead of normal time

This is the big one, and almost nobody outside the commercial seat gets it right.

Say a labourer is on site for a long day and, once you take out unpaid breaks and non-productive time, they've worked 10 paid hours. Under the award the first 8 are ordinary time (normal time); the 2 beyond that are overtime. Now there's one hour to come out — a late start, a wash-up, an unpaid stretch that shouldn't be charged.

Which hour do you take it off?

The drafter knocks it off the top — the last hour of the day, which happens to be overtime. The commercial structure says the opposite: the unpaid time sits inside the ordinary span, so it comes off normal time first. The overtime was genuinely worked at the end of the day. It stays.

Watch what that does to one labourer, on one day, with illustrative rates of $40 normal / $60 overtime:

Illustrative numbers — not benchmarks. Your rates and award will differ.

Twenty dollars. Shrug-worthy on its own. Now run it across a 10-person crew, 20 working days a month, and it's roughly $4,000 a month — near enough to $48k over a 12-month job — gone, because the deduction came off the wrong band.

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Unpaid time comes off normal time first. The overtime was worked — it stays.

This is exactly why tectm's labour engine deducts breaks from normal time first, before it touches the overtime bands — it's the same 7-step calculation you can drive yourself right here:

Mistake 2: treating every hour as ordinary time

Overtime isn't the only thing the spreadsheet flattens. The award defines a span of ordinary hours — broadly 7am to 6pm, Monday to Friday, 38 hours a week with a daily ceiling of 8 (Fair Work, MA000020). Work performed outside that span isn't ordinary time, even on a weekday. An early start before the span opens, or hours past 6pm, band differently — and at a higher rate.

A drafter who treats all worked hours as ordinary time doesn't just miss overtime at the end of a long day. They mis-band the front and back of every shift that runs outside standard hours — and they have no way to know, because the spread of hours lives in the contract, not the timesheet.

Those hours come from somewhere, too. If your dockets aren't capturing start, finish and break properly on the day, the band logic has nothing to work with — see why docket discipline is the whole game.

Mistake 3: leaving award allowances off the claim entirely

Ask a non-commercial drafter what an "all-purpose allowance" is and you'll get a blank look. The spreadsheet has columns for hours and a rate. It has no column for the half-dozen allowances the award entitles the worker to — so they simply never appear on the claim.

The ones that go missing most:

• Fares and travel — a flat daily allowance, paid per day worked. North of $20 a day, per worker at the time of writing, and indexed up every July (Fair Work).
• Industry allowance — a standing weekly amount for the disabilities of construction work.
• Leading hand — a margin for anyone in charge of others, scaled by how many they supervise.
• Tool, multistorey, first aid, underground — and the rest of the special-rates list, each triggered by the conditions on site.

None of these are optional generosity. They're entitlements baked into the award. Leave them off and you're not "keeping the claim lean" — you're declining money the job is owed.

Mistake 4: getting the rate base wrong

Here's the subtle one that quietly corrupts every other number on the line.

Some allowances are all-purpose: they fold into the ordinary hourly rate. That means when you calculate overtime or a weekend penalty, you multiply the higher, allowance-loaded rate — not the bare base rate. Others are flat: paid once, on top, and never multiplied.

Get that wrong and the error compounds. Use the bare base rate when you should have used the all-purpose rate, and every overtime hour, every Saturday penalty, every public-holiday line on that claim is calculated off the wrong number. It's not one missed allowance — it's a low foundation under the entire calculation.

Which allowances are all-purpose is set by the award clause, not by what feels right. That's exactly the kind of thing a person drafting from a timesheet has no way to know — and no reason to suspect they're getting wrong.

Mistake 5: fumbling weekend, public-holiday and overtime penalties

The penalty structure is where claims swing in both directions — under and over.

The factual shape under the award:

• Weekday overtime — time-and-a-half for the first two hours, double time after that.
• Saturday — time-and-a-half for the first two hours, double time after midday.
• Sunday — double time all day.
• Public holidays — double time and a half.

Two ways drafters trip on this. The first is simply missing the uplift — a Saturday shift claimed at the flat weekday rate, money left on the table. The second is the opposite and more dangerous: pyramiding — stacking a penalty on top of a penalty. Overtime worked on a Saturday is not time-and-a-half for overtime layered on top of a time-and-a-half Saturday loading. The award gives you the applicable rate; you take it once, not multiplied together. Pyramid the penalties and the certifier knocks the line back — and starts eyeing the rest of your claim.

The labour payment claim checklist

Before a labour line goes out the door, the drafter should be able to answer yes to all of these:

1. Unpaid time deducted from normal time first, not overtime.
2. Hours banded against the contract's actual span of ordinary hours, not assumed to be all ordinary.
3. Every award allowance the work triggers is on the claim — fares, industry, leading hand, special rates.
4. Overtime and penalties calculated off the correct all-purpose rate base.
5. Penalties applied once — no pyramiding, no flat-rating a weekend.

Miss one and the claim is wrong. The trouble is that a careful, conscientious person can get every arithmetic step right and still land on the wrong number, because the rules they're missing were never on the page in front of them.

Where tectm fits

The fix isn't to send your accounts team on an award course. It's to put the award structure into the tool that prices the work, so the calculation is right before anyone drafts a thing:

• Contract-aware rates at capture — the labour engine applies the award structure on the day the work happens: normal-time-first break deduction, the correct overtime bands, no pyramiding.
• Hours of work set at onboarding — so every docket bands against the real ordinary span for that contract, and out-of-span hours land in the right band on their own.
• Allowances built into the rate, not bolted on after — all-purpose allowances fold into the base, so overtime and penalties calculate off the right number every time.

The result is a labour claim where the structure is already correct when it's drafted — so it isn't a timesheet times a rate hoping to survive a certifier. It's the award, done right, the first time. And a claim that's right the first time is one that actually gets paid in full.