Differentiating Rates and How to Make Them Simple

Author: Eugenija Steponkute
Published: 23/10/2023

While working with contractors is a great solution to many, differentiating rates that come with it can be troublesome. In this article, we will be exploring the options finance teams have to simplify contractor payments

Hiring a contractor or a few to bring a project to completion isn’t a new practice. If anything, it’s a widely spread one due to it being effective in terms of delivering the result yet keeping the cost at bay. However, it doesn’t come without challenges either. One of them is differentiating rates, a common cause of headaches and unwanted time expenditure for the finance teams. No matter how often companies may be working with contractors, there aren’t many that found a way to simplify these calculations without sacrificing either time or accuracy. 

If you are frequently bringing contractors on board and are among those who are still looking for more effective ways to deal with differentiating rates - this article is for you. We know a way to make the process both quicker and simpler, without compromising any aspect of your business. But first, let’s understand why is this a conversation at all. 

Why Are There Differentiating Rates in Construction?

The reason why differentiating rates are prevalent in construction is similar to why they exist in other industries. Namely, it’s because independent contractors normally have their own rates, set based on their availability, skill level, requirements of additional equipment and many other factors. 

However, not every contractor charges a different rate; some stick to either stationary hourly pay, while others will have a preset price for their services. In other words, there are many ways in which contractors are paid and not all of them involve differentiating rates. 

Simplifying Differentiating Rates

Now let’s go back to the topic of the differentiating rates often being complex. The first part of this section will look into what makes them complicated. And the second one will propose a solution we believe is the best. 

Reduced Threat of Human Error

Given how complicated and confusing calculations of the dynamic rates can get, it is a breeding ground for human error. Even when the worker charges a different rate for AM/PM work hours, there is a lot of potential for things to go wrong. Let alone when there are more criteria such as specific tasks, weekdays, deliverables and many others. And while very understandable, these errors are very hard to forgive. 

But fret not - there are ways to minimise the threat of such mistakes occurring. And we don’t mean involving multiple people in the process of checking over each other’s work, or potentially additional training. Human error barely occurs due to negligence, therefore employees shouldn’t be blamed, punished or scrutinised for it. The best way to avoid it is to get humans out of the process, fully handing it over to the machines. As it happens, there is software that allows you to do just that. Let’s talk about how it works next. 

Timesheet Rules

The best tool to deal with differentiating rates is digital timesheet software. However, the most basic of the basics isn’t likely to make the cut. To be more specific, you would need a time tracking solution that allows you to customise your timesheets instead of doing the bare minimum of simply recording time. Thankfully, not only there are many options available on the market, but most of them are also fairly competitively priced. In other words, while there will be a price difference, it’s not likely to be big. 

The perfect solution for companies that work with contractors with differentiating rates is one that has a feature called timesheet rules. It is, essentially, a way to put limitations and different price brackets on certain hours within a specific timesheet. For example, a timesheet rule might not allow the worker to exceed 20 work hours per week. Or, if we stay on topic, it can be set to calculate a different rate on AM/PM hours, different hours of the week, and so on. So, essentially timesheet rules take a basic timesheet and allow you to customise it to track hours and rates in specific ways, making their calculation easier and automatic. 

Automation Saves the Day

There is more to benefits of a timesheet tool when speaking of differentiating rates. In fact, using one also unlocks options for automation, which is another great asset when it comes to speeding up your pay cycles and forecasting future projects. 

Easy Data Transfer

One thing we recognise can be a bit of a downer is having to manually move data from one tool to another. It’s time-consuming, even in small quantities, let alone when dealing with bigger volumes. Once again, it’s very easy to make a mistake, especially if you’re keying data in. What’s more, the smallest mistake is going to skew everything that comes after, potentially sabotaging you in the long run. Spotting the same error is usually a tough task too, not to mention having to redo all the work that came post it. 

The process can be automated. Not only this does this mean that once again you’ll be closing the door to potential human error, but also the processing time will be much quicker. To achieve that, however, you will need to have your tools communicate. In other words - they need to be linked together through an integration. Most vendors will normally advertise available integrations, and some would even be willing to create a custom API. All you need to do is ask.

Detailed Reports

Since we’ve gotten on to the topic of data, it’s important to remember that simply collecting and moving it around isn’t enough. To be truly useful, it should be thoroughly analysed. In the case of differentiating rates, analysing your figures will help you ensure you’re not going over the project’s budget. It will also allow you to be more accurate in future estimates, especially when handling similar projects or working with the same contractor. 

However, analysing data is only possible when it’s condensed in a report. Alas, most of the time it’s scattered all over the place, making the job of putting a report rather tedious. The more detailed it is, the longer it will take to put one together, and by the time it’s done it might have even lost its relevance. However, if you automate reporting, the software will quickly fetch the data you need, often in greater detail than you could expect to achieve yourself. Not only that  - it will also crunch it for you in a format that is easy to read, digest and analyse. 

Where to Find the Right Solution?

If you’re eager to set off looking for a solution to help you become more efficient in handling differentiating rates - hold your horses. It is closer than you think. In fact, you might already be at the right place.

Timesheet Portal for Differentiating Rates

At Timesheet Portal, we are working with many companies that utilise contractors and deal with differentiating rates on a daily basis. What’s more, a big chunk of our clientele is actually from the construction industry. We are, therefore, well-versed in sector-specific requirements, core operations and day-to-day challenges. That said, while we are not bound to one industry, we certainly have what it takes to service construction firms. 

We integrate with the majority of accounting systems and have a sophisticated yet simple-to-use timesheet rules system. The platform comes with pre-built timesheet and report templates that can be customised, but you can also create custom ones from scratch if that’s more convenient. Customisation is also made very simple in Timesheet Portal. You use a drag-and-drop menu to put together the layout of your preference. As for the implementation of timesheet rules - it too only takes a couple of clicks. And even if you still don’t feel confident setting them up yourself, our team of specialists will be happy to help. 


Differentiating rates can really dampen the experience of working with contractors due to how complex and prone to mistakes they can get. However, they can be simplified by using the right software, such as customisable timesheets. These tools help irregular rates to be calculated automatically, and if integrated with other solutions, these numbers are sent straight into another system. With data from all linked solutions provided, you’ll also get some very in-depth reports, possibly discovering insights you’d otherwise have no access to. 

However, not every contractor is charging differentiating rates, and not every timesheet solution is equipped to accommodate different needs. At Timesheet Portal, we diversified our system as much as we could, ensuring all types of construction firms would find what they’re seeking. We hope you are one of them. 

We may be what you’re looking for. Let’s confirm it.

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Timesheet Portal online software provided by Anfold Software Ltd, a registered company in the UK.