How to calculate project hours variance

Hours variance answers a simple question: is more or less work being done than was planned? It is the quickest indicator of whether a project is drifting over budget, and it is calculated with a subtraction.

The formula

Hours variance = actual hours − estimated hours

• Estimated hours: what you calculated the work would cost, normally task by task, before starting.
• Actual hours (or logged hours): what the team has really recorded.
• Positive: more work has been done than planned (an overrun). Negative: less.

To compare it across projects of different sizes, turn it into a percentage:

Variance (%) = hours variance ÷ estimated hours × 100

Step-by-step example

A project has three tasks:

1. Add up the estimated hours: 40 + 80 + 30 = 150 h.
2. Add up the logged hours: 46 + 74 + 42 = 162 h.
3. Subtract: 162 − 150 = +12 h of variance.
4. As a percentage: 12 ÷ 150 × 100 = 8 % above plan.

Note that it is calculated on the total, not by adding percentages per task: the configuration task, which is under, partly offsets the others.

How to read it

• A small, steady variance (for example 5 %) is usually normal: estimates are never perfect.
• A variance that grows every week is the warning sign: look at which tasks cause it and why (a short estimate, unplanned work, client changes).
• Compare what is done with progress. An 8 % variance with 90 % of the work done is very different from the same with 30 %. If progress lags behind the hours consumed, the problem is bigger than it looks.
• Look at where it is, not just how much. A variance concentrated in one phase points to that phase.
• If client changes consume hours, record them as change requests so you can justify them.

The most common mistakes

1. Estimating only the project total, without breaking it down by task: you will not know where the variance comes from.
2. Logging time late or in bulk (a single entry at month end): the variance arrives when it can no longer be corrected.
3. Mixing project tasks with support work without telling them apart.
4. Not revisiting the estimate when the scope changes: the variance looks "bad" even though the team is working well.

How it is done in PjMan

PjMan calculates the variance without spreadsheets:

1. Estimate the hours of each task on its page (estimated hours field).
2. The team logs their hours on the tasks: from the task page, from My work, or by asking the assistant ("log 2 hours on T0003"). The PM can log time on behalf of the team.
3. Look at the project header: it shows the hours logged, the estimated hours and the variance (in red if positive). The same figure appears on each project card in the list, and each phase shows its hours logged and estimated. (Project summary)
4. Reports gathers the variance next to completed, pending and overdue tasks, filterable by project. (Reports)
5. If you need to take it away, Queries exports the time entries to a spreadsheet (.xlsx) with the same filters. (Queries)

PjMan's variance compares the hours logged with the sum of the task estimates and is independent of the project's hours budget, which has its own indicator.

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Frequently asked questions

What is the difference between hours variance and cost variance? Hours variance measures effort; cost variance measures money. In PjMan, expenses have their own deviation (actual − planned), calculated per currency. (Expenses)

Is it bad if it is negative? Not necessarily: the estimate may have had some margin, or the work may be unfinished. Compare it with progress.

How often should I look at it? Weekly, while the project is under way.