Construction Payroll Services Guide • Updated October 2026
Payroll for Construction Companies: Certified Payroll, Job Costing & Costs
Contractors face payroll rules most businesses never see: certified payroll, prevailing wages, union fringes, multiple pay rates and crews in several states. Learn what’s required and compare construction payroll services that handle it.
Compare Construction Payroll Quotes → See Construction Payroll CostsHow Does Payroll Work for Construction Companies?
Payroll for construction companies works like standard payroll plus industry-specific requirements: weekly certified payroll and prevailing wages on public projects, multiple pay rates per worker, union dues and fringe reporting, job costing by project, multi-state tax withholding for traveling crews, and workers’ comp by job class. General payroll software costs about $49 per month plus $6 per employee but usually can’t produce certified payroll; construction payroll services and full-service providers with construction modules typically cost more but automate it.
Not sure what you need? Tell us about your crews and projects and we’ll match you with construction payroll providers.
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8 Payroll Challenges Unique to Construction
These are the reasons generic payroll setups often fall short for contractors.
Certified payrollFederally funded jobs require weekly certified payroll reports (Form WH-347 or equivalent) for every worker on site.
Prevailing wage & fringesPublic projects set minimum wage and fringe benefit rates by trade, county and job.
Multiple pay ratesOne worker can earn different rates for different trades, jobs or public vs. private work in the same week.
Union payrollDues deductions, fringe remittances to union funds and monthly union reports.
Job costingLabor plus burden (taxes, comp, benefits) charged to each job, phase and cost code.
Multi-state & local taxesCrews that cross state or city lines need withholding for each work location.
Workers’ comp class codesPremiums depend on job classification; pay-as-you-go comp ties premiums to each payroll.
Subcontractors & seasonal crews1099 subs, W-2 field crews, per diems and seasonal hiring all in one payroll.
Certified Payroll and Prevailing Wage Explained
Certified payroll is a weekly report that contractors and subcontractors on federally funded construction projects must submit to prove they paid workers the required prevailing wages and fringe benefits. The Davis-Bacon Act covers federal and federally assisted construction contracts over $2,000, and many states have their own prevailing wage laws for state and local public works.
How to prepare certified payroll, step by step:
Find the wage determination
Get the Davis-Bacon or state prevailing wage determination in your contract for each trade on the job.
Classify every worker by trade
Assign each worker the correct classification and rate; workers doing multiple trades need time split by classification.
Track hours by job and classification
Record daily hours per project and trade, with overtime calculated on the correct regular rate.
Pay wages and fringes
Pay at least the prevailing base rate plus fringe benefits, either as bona fide benefits or as cash.
Prepare the weekly certified payroll report
List each worker’s classification, hours, rates, gross pay, deductions and net pay on Form WH-347 or an equivalent.
Sign and submit the Statement of Compliance
An authorized officer signs and the report goes to the prime contractor or agency every week the job is active.
Bidding on public work? Get quotes from payroll providers that handle certified payroll and prevailing wage.
Compare Construction Payroll QuotesHow Much Does Construction Payroll Cost?
Construction payroll costs about $199 per month for 25 workers on general small business payroll, roughly $295 per month with a per-run construction payroll service, and $375–$750 per month with a full-service provider’s construction modules. Certified payroll, union reporting and job costing are what drive the difference.
| Payroll option | What it costs | 25-worker example | Certified payroll |
|---|---|---|---|
| General small business payroll (Gusto, OnPay) | $49/mo + $6/employee | About $199/month | No — manual or third-party add-on |
| QuickBooks Payroll + certified payroll add-on | $50/mo + $6.50/employee + add-on | About $213/month + add-on | Via add-on (e.g., Points North) |
| Construction payroll service (e.g., Payroll4Construction) | Priced per pay run | About $136 per biweekly run (≈ $295/month) | Yes, built in |
| Full-service payroll with construction modules (ADP, Paychex) | Reported $15–$30 per employee/month | About $375–$750/month | Add-on module |
| Construction ERP (Foundation, Sage 300 CRE) | Several thousand dollars upfront + annual maintenance | Varies by modules and users | Yes, built in |
Estimates from published 2026 list prices and industry-reported quotes; construction payroll providers price by headcount, pay frequency, certified payroll volume and modules. Confirm with a quote.
For fee details beyond construction, see our payroll outsourcing cost guide.
Best Payroll Services for Construction Companies
The right fit depends on how much public and union work you do. Contractors with regular certified payroll usually want it built in.
| Provider | Starting price | Best for | Certified payroll |
|---|---|---|---|
| Payroll4Construction | Per pay run (quote) | Certified payroll, prevailing wage, union reporting and job costing built in | Built in |
| eBacon | Custom quote | Certified payroll with union and prevailing wage calculations, multiple pay rates per job | Built in |
| Foundation Software | Custom quote (upfront + maintenance) | All-in-one construction accounting and payroll, WH-347 generation | Built in |
| Sage 300 CRE / Sage 100 Contractor | Enterprise pricing | Large contractors with complex union and multi-company payroll | Built in |
| ADP RUN / Workforce Now | Custom quote | Union payroll codes, job costing tools and room to grow into HR and benefits | Add-on |
| Paychex Flex | Quoted (entry reported from $39/mo + $5/employee) | Hands-off payroll with specialist support; construction features cost more | Supported |
| QuickBooks Payroll | $50/mo + $6.50/employee | Job costing through QuickBooks accounting; best for contractors already on QuickBooks | Via add-on |
| Gusto | $49/mo + $6/employee | Small contractors and subs without government work; contractor-only plan available | No |
Pricing and features as published or reported in 2026; verify during your demo.
Small contractors, private work
Gusto, OnPay or QuickBooks Payroll keep costs low. See small business payroll.
Regular public or union work
Payroll4Construction or eBacon automate certified payroll, prevailing wage and union reports.
Mid-sized and large contractors
Foundation, Sage or ADP Workforce Now. See mid-sized business payroll.
Must-Have Construction Payroll Features
Bring this list to every demo.
Certified payroll reports
WH-347 and state-specific reports generated straight from payroll.
Prevailing wage tables
Rates and fringes by trade, county and project applied automatically.
Job costing & cost codes
Labor and burden posted to jobs, phases and cost codes.
Multiple rates per employee
Different rates by trade, job or shift in the same pay period.
Union reporting
Dues, fringe remittances and union fund reports.
Mobile time tracking with GPS
Field crews clock in by job from their phones.
Multi-state tax filing
Withholding and filings for every state and city you work in.
Construction accounting integrations
Sync with QuickBooks, Foundation, Sage or Procore workflows.
Job Costing: Know Your True Labor Cost per Project
Job costing assigns every labor dollar, plus its burden, to the job, phase and cost code it belongs to. Burden includes employer payroll taxes, workers’ comp, union fringes and benefits, which can add a substantial share on top of wages. Contractors who don’t capture burden by job routinely underbid.
Related Payroll Guides
Compare the best payroll software and the best payroll outsourcing companies, learn about payroll tax filing for multi-state crews, read 7 payroll errors that could be costing you money, or find payroll providers near you. Other industries: manufacturing, restaurants.
Construction Payroll FAQs
How does payroll work for construction companies?
Construction payroll works like regular payroll but adds industry rules: certified payroll and prevailing wages on public projects, multiple pay rates for workers who do different trades, union dues and fringe reporting, job costing by project, multi-state and local tax withholding for traveling crews, and workers’ compensation by job classification.
What is certified payroll in construction?
Certified payroll is a weekly report required on federally funded construction projects covered by the Davis-Bacon Act and on many state public works jobs. It lists each worker’s classification, hours, pay rate, fringe benefits, deductions and net pay, and includes a signed Statement of Compliance. The federal format is Form WH-347.
When is certified payroll required?
Certified payroll is required on federally funded or assisted construction contracts over $2,000 covered by the Davis-Bacon Act, and on state or local public works projects covered by state prevailing wage laws. Contractors and subcontractors submit reports weekly while they work on the project.
What is the difference between prevailing wage and Davis-Bacon?
Davis-Bacon is the federal law that sets prevailing wages and fringe benefits on federally funded construction. Prevailing wage is the broader term, and many states have their own prevailing wage laws for state and local public works with their own rates and reporting rules.
How much does construction payroll cost?
General small business payroll costs about $49 per month plus $6 per employee but usually lacks certified payroll. Construction-specific payroll services typically price per pay run, for example about $136 per biweekly run for 25 workers, and full-service providers with construction modules are often reported at $15 to $30 per employee per month.
Can QuickBooks Payroll or Gusto do certified payroll?
Not natively. QuickBooks Payroll and ADP RUN can produce certified payroll through third-party add-ons such as Points North, while Gusto does not offer certified payroll. Contractors with regular public work often choose construction-specific payroll such as Payroll4Construction, eBacon or Foundation.
How is overtime calculated for construction workers with multiple pay rates?
When a worker earns different rates in the same workweek, overtime is generally based on a weighted average regular rate of all hours worked, unless the employer and employee agree in advance to pay overtime at the rate for the work performed during the overtime hours, as federal rules allow.
How do construction companies handle payroll in multiple states?
Construction companies generally withhold state income tax for the state where the work is performed, register for withholding and unemployment in each state, and follow reciprocity agreements between neighboring states. A payroll provider with multi-state and local tax support automates this.
Should subcontractors be paid through payroll?
Independent subcontractors are paid through accounts payable and receive a Form 1099-NEC when paid $2,000 or more in a year (the 2026 threshold), while workers the company directs and controls are employees who must be paid through payroll. Misclassifying employees as subcontractors can bring back taxes and penalties.
What is the best payroll for construction companies?
Payroll4Construction and eBacon are strong choices for contractors with certified payroll and union needs, Foundation and Sage suit larger contractors that want construction accounting and payroll together, ADP and Paychex suit growing companies that want full-service payroll with construction add-ons, and Gusto or QuickBooks work for small contractors without public work.
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