Employee vs. Project Time Tracking: One system or separate?

Sep 22, 2025 by Alexander Huber

One system for both – or better to separate?

When project-oriented companies introduce or modernize time tracking, the same question almost always arises: Should effort/project time tracking (project, task, “billable” time) and attendance tracking (working time, breaks, absences) live in one system or be deliberately separated?

The answer is less a tool question and more about purpose, roles, data protection, and governance. This article brings together current facts, legal guardrails, and lessons from IT services projects in the DACH region.

1) Status quo: How widespread is time tracking in DE & AT?

Germany: According to a Bitkom survey (06/2025), 74% of companies record working time; a further 26% are preparing or still lack a full solution. Before the 2022 Federal Labour Court ruling, it was only 30%. The sharp increase is therefore legally driven (Bitkom).
Germany (quality of implementation): An analysis by the Hans Böckler Foundation stresses that time tracking is “widespread, but partly unsystematic.” Especially in smaller firms, a systematic and analyzable solution is often missing (Hans-Böckler-Stiftung).
Small companies: An (older but telling) survey shows 60% of companies with < 50 employees work without time tracking; among companies >50 employees, 92% use at least partial tracking—a clear size effect (Telematik-Markt).
Austria: The duty to record working time is clearly regulated: § 26 AZG requires records of hours worked (incl. averaging periods). In practice, Excel/stand-alone solutions are common instead of analytics-ready systems (RIS § 26 AZG).
Health & work organization: The BAuA (Working Time Survey 2023) reports that missing tracking correlates with boundary blurring, poorer switch-off, and lower satisfaction. Adoption is rising, but the benefit depends on system quality (BAuA Bericht kompakt).

These figures show that many companies are still in transition. This is exactly where the fundamental choice—integrate or separate—decides acceptance, data quality, and controllability.

2) Terms & target pictures: two kinds of time, two purposes

Working time / attendance tracking records start, end, breaks, absences, overtime and serves health & safety, payroll, and compliance. The CJEU requires an objective, reliable and accessible system for daily working time (C-55/18) (Curia), the Federal Labour Court (BAG) confirms the duty to introduce a system (1 ABR 22/21) (BAG press release), and the BMAS clarifies FAQs (e.g., home-office applicability) (BMAS FAQ).

Effort / project time tracking (task time, “billable/non-billable”) assigns hours to clients/projects/tasks. This is the basis for billing, budget control, forecasting, and contribution margin.

Both measure hours, but with different purposes. Working time is legal duty & protection; effort time is business steering & value creation.

3) User groups & perspectives (who needs what?)

In practice, the decisive factor is less the technology than who works with time data and for what the data is needed. Different user groups pursue distinct goals—from legally sound proof to business steering.

Management / executives: want consistent KPIs (utilization, billability, margin, overhead) with minimal latency—ideally from a single source.
Controlling & project leads: need granular effort data, availability, and budgets; HR details matter only insofar as they affect capacity.
HR / payroll / back office: are responsible for law, rest times, allowances, vacation and need working-time data in a compliant, auditable form.
Operational staff (dev/consulting/field): want fast, low-friction time entry, ideally integrated with calendar, ticketing, or IDE.

In practice, it’s less about technology and more about who uses the system and to what end. Different groups pursue very different goals, from compliant evidence to business steering.

Consequence: An integrated system must finely control roles, permissions, and visibilities; with separate systems, interfaces and BI must be set up cleanly to produce a complete picture.

In Time Cockpit projects we often see this pattern: project leads need access to which activities consume how much time to steer progress and budgets. At the same time, they must not see sensitive HR data such as hour balances, absences, or reasons for leave—these belong to line managers or HR.

Exactly this separation can be implemented cleanly and in a privacy-compliant way with a fine-grained authorization model.

4) One system for both – opportunities and risks

A single system for working and effort time sounds like the logical choice at first: fewer tools, unified data, less friction. However, anyone mapping both worlds in one system must carefully balance transparency, data protection, and complexity—otherwise simplification quickly turns into extra work.

4.1 Why integration convinces

One data model: no redundancies or conflicting IDs/mappings; a single source of truth.
Real-time transparency: utilization, billability, margin, absences, and capacity without BI latency.
Less integration effort: payroll/ERP/BI consume one API; fewer mappings/errors.
Adoption & efficiency: people enter time once; approvals, exports, audits stay consistent.

4.2 Where integration gets demanding

Data protection & co-determination: sensitive HR data (e.g., sick days, comments) must not surface in project reports.
Authorization model: field/report masking, roles, and separate exports (payroll vs. invoicing) must be defined before rollout.
Configuration load: working-time rules (breaks, rest, maxima) and project logic (rates, budget warnings, approvals) must be handled together.
Culture & trust: integration must be framed as an enabler of transparency, not surveillance.

5) Separate systems – strengths and trade-offs

The opposite approach is to run working time and effort time deliberately in separate systems. This creates clear accountabilities and can simplify privacy and co-determination, but often at the price of more interfaces and less immediate transparency.

5.1 Why separation can make sense

Clear purpose separation: HR data stays physically in HR; the project tool focuses on value creation.
Privacy made easier: data minimization is organizationally simpler; lower risk of HR details “leaking.”
Simpler authorization: fewer overlapping roles; clear responsibilities.
Swapability: tools can be modularly replaced/evolved.

5.2 What separation complicates

Interfaces & sync: availability, absences, and capacity must stay in sync; more error sources and latency.
No live holistic view: KPIs emerge only through BI consolidation (time, effort).
Double ops: two licenses, two admin worlds, two support paths.
Longer rollout: two projects instead of one; more organizational change.

6) Non-billable time: the underestimated lever

Non-billable time (internal meetings, onboarding, training, admin) quickly accounts for 20–35% of total time in service firms. Without tracking it, projects look artificially more profitable, forecasts too optimistic, and capacity planning gets distorted.
An integrated setup makes the ratio billable : non-billable : absent visible, helping identify and reduce overhead drivers.
More details and practical tips (German): „Nicht verrechenbare Stunden erfassen“ (Time Cockpit Blog).

7) Additional aspects that influence the decision

Beyond legal, organizational, and technical considerations, several factors materially shape the choice between one or two systems—often without being obvious at first glance. Especially in dynamic environments like IT services and project businesses, topics such as agility, transparency, culture, and trust play a decisive role.

7.1 Law & governance (DE/AT)

EU framework: CJEU C-55/18 requires measurable, reliable working-time tracking (Curia).
Germany: BAG 1 ABR 22/21 affirms the duty to introduce; BMAS clarifies questions (incl. remote work) (BAG PR; BMAS FAQ).
Austria: § 26 AZG requires records (RIS).
Ergonomics: BAuA highlights benefits against boundary blurring (BAuA).

7.2 Agile ways of working & dynamics

When scope and priorities iterate, integration enables earlier corrections: plan/actual by sprint, burn rates, velocity trends—without weeks of BI pipeline delay.

7.3 “Invisible work” & presenteeism

Work that falls nowhere (refactoring, reviews, internal prep) often remains invisible in separated setups. An integrated model makes it measurable and prevents presenteeism illusions (attendance ≠ productivity).

8) Decision aid in six steps

Ultimately, every discussion converges on a strategic core question: how much integration can the organization handle—and how much separation does it need? Our practice shows there is rarely a single right answer; the optimal approach forms along culture, privacy, and steering ambitions.

Clarify purpose: Which questions should time tracking answer first (compliance vs. steering)?
Define roles: Who needs which field? Which HR details must never enter the project domain?
Choose architecture:
- One system if real-time steering & fewer integrations are top priority and you have authorization-model expertise.
- Two systems if privacy/organization must remain strictly separated and BI consolidation is mature.
Cut the data cleanly: strictly limit HR context fields; keep project context rich; two export paths (payroll vs. invoicing).
Pilot & measure: 4–6 week pilot with one team; metrics: double entry, corrections, invoice hit rate, adoption.
Communicate & train: frame transparency as a benefit; deliver quick wins (mobile entry, calendar sync).

Practical tip: Even in an integrated setup like Time Cockpit, maintain strict functional separation: distinct approvals (HR ≠ project), separate exports, audited access. This combines live transparency with privacy safety.

9) Conclusion: When to integrate, when to separate—and why “hybrid” often wins

Choosing between integration and separation is a strategic junction, not a purely technical one. It shapes not only privacy and governance, but also how transparent and steerable a company’s value creation becomes. In practice, neither total separation nor full integration convinces over time—systems that connect both intelligently strike the best balance between trust, efficiency, and control.

Integrate when real-time transparency, unified governance, and lower integration effort are priorities. You’ll get a consistent, fact-based view—from project to payroll—that enables solid decisions. This requires a clean authorization model and clear communication that transparency supports collaboration, not surveillance.

Separate where privacy or organizational remits take absolute precedence—e.g., in highly regulated industries or corporate structures with independent HR and controlling units. BI/interfaces can also yield valid overall views—typically with more effort and less immediacy.

In reality, a hybrid approach is often most practical. It combines both worlds: one system with two strictly separated data domains, field masking, distinct approvals, and well-defined export paths. This way, transparency and efficiency emerge without compromising privacy or co-determination.

Bottom line: Time tracking is not a policing tool but a strategic steering and wellbeing topic. The law makes working time mandatory (C-55/18 CJEU; 1 ABR 22/21 BAG; BMAS FAQ; § 26 AZG).
Effort time makes value creation visible. Both together—technically integrated but purpose-separated—deliver the reliable big picture that management, HR, controlling, and teams need.

Sources & further reading

CJEU, C-55/18: duty to an objective, reliable and accessible daily working-time system (Curia, press release PDF)
Federal Labour Court, 1 ABR 22/21: duty to introduce, scope of co-determination (BAG press release)
BMAS: Working time FAQ—scope, form, responsibility (BMAS FAQ)
Austria: § 26 AZG—recording and disclosure duty (RIS legal text)
BAuA: Working time tracking—findings of the 2023 survey (Brief report) (BAuA topic page)
Bitkom (06/2025): Three quarters of companies track working time (press info)
Hans-Böckler Foundation: Widespread but partly unsystematic (analysis)
Small firms without tracking: 60% < 50 employees (historical survey) (Telematik-Markt)
Practice: Non-billable hours—levers for margin & control (Time Cockpit Blog)