BCIS basics: taking the labour out of labour calculations

Calculating the cost of construction labour isn’t the simplest task when undertaken manually.

There are multiple moving parts to consider.

For instance, the latest updates to industry wage agreements, National Insurance or the National Living Wage and the National Minimum Wage.

That’s why BCIS simplifies this process – we calculate labour rates for you and use them to inform our suite of indices and cost tools.

In turn, these enable our subscribers to perform important actions, from measuring movements in different construction indices to finding out current daywork rates for different trades, all of which inform more confident estimating, contract management and decision-making.

How does BCIS calculate labour costs?

Construction wage rates are calculated using information from wage agreements between different unions and employer organisations that govern the conditions of employment.

BCIS monitors updates to these agreements, alongside relevant data published by HM Revenue and Customs and the Office for National Statistics.

Any changes are applied to standardised calculations to produce hourly employment costs for different trades and skill levels. This information is collected and summarised in the BCIS service.

These basic rate calculations have a defined purpose in construction contracts that contain daywork clauses.

Using this information, BCIS calculates non-productive overtime (NPO) rates that reflect current working conditions and practices in the industry. NPO rates also form inputs to other calculations in the BCIS service, including BCIS Schedule of Rates and the labour element used in index calculations.

Tracking cost movement

BCIS labour calculations feed into several index series.

For example, NPO rates partly inform BCIS Cost Indices, a compilation of index series that measure changes in construction costs.

This could be as high-level as assessing building costs with the BCIS General Building Cost Index (GBCI), or more specific measures, such as comparing labour costs over time using the BCIS Labour Cost Index.

BCIS labour calculations also inform the labour element within BCIS Price Adjustment Formulae Indices to support the measurement of underlying inflation.

For instance, these calculations are used to weight work category indices, such as scaffolding, to reflect the relative contribution of labour alongside plant and materials.

By incorporating these calculations into the service, BCIS provides a consistent basis for tracking labour-driven cost change without requiring users to reconstruct component calculations.

Delving into dayworks

Labour calculations are also applied within BCIS Dayworks.

BCIS Dayworks provides standard hourly base rates for more than 50 grades of operative across building, electrical, heating and ventilation and plumbing trades. It is designed to support labour valuations for instructed works outside the main contract scope.

In practice, dayworks are not priced through a bill of quantities. They reflect the net cost of labour, plant and materials required for specific instructed works, with overheads, profit and incidental costs applied separately.

Accessible to BCIS CapX, BCIS OpX and BCIS TotX subscribers, BCIS Dayworks provides guide rates covering the net cost element. Subscribers apply their own mark-up in line with contractual arrangements.

Using BCIS Dayworks, subscribers see what the latest guide rates are for different trade operatives, as well as how they’ve changed over time and why.

For instance, how much the hourly rate for a building craft operative increased by as a result of changes to National Insurance contribution rates and limits in March 2025.

Rates are regularly updated in accordance with BCIS’s interpretation of the relevant Definition of Prime Cost of Daywork. Changes in statutory costs or wage agreements are reflected through the underlying labour calculations.

In the unlikely event that subscribers require a rate not calculated by BCIS, a detailed breakdown is available to support adjustment and interpretation.

Exploring wage agreements

Wage agreements underpin index calculation and labour cost planning.

BCIS Wages is a dedicated module setting out wage agreements established by government and industry bodies. This includes agreements such as the CIJC Working Rule Agreement for civil engineering and building works and wage grades set by the Joint Negotiating Committee for Local Authority Craft and Associated Employees.

The module is updated as new agreements and amendments are published. This provides subscribers with access to current wage data within the same environment as related cost tools and indices.

To find out more about the BCIS service and the subscription that will best suit your needs, book a demonstration with our team here.

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More BCIS Basics

Understanding project preliminaries

Six principles of benchmarking in construction

Six reasons to benchmark in construction

Using location factors in construction