Construction payroll software is designed to simplify and streamline the complex payroll processes in the construction industry. Here’s how it typically works:
- Automation: Construction payroll software automates various tasks such as calculating salaries and taxes, creating paychecks and reports, and handling complex payroll issues like prevailing wage and union fringes.
- Time tracking: Many construction payroll software solutions allow time tracking through manual entry or integration with time-tracking tools. This helps ensure accurate payroll calculations and reduces errors.
- Tax compliance: The software ensures compliance with federal, state, and local tax regulations by automatically calculating and filing taxes, including workers’ compensation premiums.
- Multi-state and multi-rate payroll: Construction payroll software can handle payroll for employees working in multiple states or with different pay rates, making it easier to manage complex payroll scenarios.
- Reporting and visibility: The software provides detailed reports and real-time dashboards, giving construction companies visibility into labor costs, payroll, and financial performance.
- Direct deposit and payment options: Many construction payroll software solutions offer direct deposit and other payment options, such as same-day or next-day deposits, to ensure timely and convenient employee payment.
When evaluating construction payroll software, look for the following key features:
- Certified payroll reporting – It should support prevailing wage and union reporting, allowing you to generate documentation for various reporting agencies easily.
- Job costing integration –The software should integrate seamlessly with project management and accounting functions, enabling you to allocate labor costs accurately to specific jobs and compile labor data for creating accurate estimates.
- Multi-state and multi-rate payroll – It should be able to handle payroll for employees working in multiple states or with different pay rates, making it easier to manage complex payroll scenarios.
- Deduction management aligned with union benefits – The software should offer accurate deduction tracking and customizable deduction categories to tailor the benefits you pay your team.
- Data security and compliance – It should have robust security measures to protect sensitive payroll information and enable compliance with data privacy regulations.
- User-friendly interface – Look for software with an easy-to-understand interface that allows your administrative staff to complete payroll processing without difficulty.
- Custom reporting for union reporting needs –Flexible payroll software should allow multiple user-defined deductions and create and export custom reports that meet various Collective Bargaining Agreement requirements.
- Time tracking and scheduling – The software should offer time tracking capabilities through manual entry or integration with time-tracking tools to ensure accurate payroll calculations.
The best construction payroll software for small businesses depends on specific needs and requirements. However, some top-performing options include:
- Gusto – An affordable and user-friendly solution that offers features such as managing multiple pay rates, tracking contractor payments, and detailed reporting. It’s suitable for small construction businesses that need to pay contractors and remote employees.
- QuickBooks Payroll – A popular choice among small and large businesses alike. It offers advanced features like managing multiple pay rates, timesheet approval, and detailed project labor cost tracking. Due to its construction-specific tools and compliance assistance, it is beneficial for construction companies.
- ADP Payroll – A comprehensive solution that provides tools for managing union wages and benefits, flexible payment options, and employee self-service portals. It suits small construction businesses that navigate complex payroll and HR requirements.
- Rippling – Offers a range of features, including time tracking, direct deposit, and detailed reporting. It’s known for its ease of use and flexibility in managing payroll for employees and contractors.
- eBacon – Excel is easy to use and offers automated payroll processing, compliance management, and detailed reporting features. It’s suitable for small construction businesses prioritizing simplicity and accuracy in their payroll processes.
Construction payroll software pricing varies on the provider and specific features and services. Here are some examples of pricing for different construction payroll software options:
- Gusto: Starting at $40/month plus $6/month per person for employees and contractors.
- QuickBooks Payroll: Payroll Core starts at $22.50/month + $6/employee/month, Payroll Premium starts at $40/month + $8/employee/month, and Payroll Elite starts at $62.50/month + $10/employee/month.
- ADP Payroll: Custom pricing is available, with options for different packages and services.
- Paychex: Plans start at $39 + $5 per employee per month, with more detailed pricing available through their online quote generator.
- eBacon: Pricing based on a quote received, including union and prevailing wage calculations for 25 people.
- Rippling: Pricing is based on a quote received, with detailed information on their website.
- Payroll4Construction: Pricing is based on a quote received, with detailed information on their website.
- ConstructionPayroll.com: Pricing is based on a quote received, with detailed information on their website.
An employment bond, often referred to as a work bond or service agreement, is a contractual arrangement between an employer and an employee that goes beyond the typical terms of an employment contract. This legally binding document outlines specific conditions and commitments that both parties agree to during the course of employment.
In practice, bonds usually set a fixed service period and may require repayment of employer-covered costs (e.g., training, relocation) if the employee leaves early. Employers use bonds to protect their investment and promote retention, since potential paybacks discourage premature exits.
Terms vary by company and jurisdiction, so review the agreement before signing and understand any financial obligations tied to early termination; violating a bond can trigger agreed damages or other remedies.
To calculate Davis-Bacon wages, contractors must follow prevailing wage requirements set by the U.S. Department of Labor for federally funded projects. Key steps include:
- Identify job classifications: Match workers (e.g., laborers, electricians) to correct categories.
- Check prevailing rates: Use DOL wage determinations for your project’s location.
- Add fringe benefits: Include health, retirement, or vacation pay.
- Calculate pay: Multiply wage rate by hours worked.
- Apply overtime: Pay 1.5× for extra hours.
- Verify compliance: Review calculations against contract and labor standards.
Contract labor on Schedule C refers to payments made to independent contractors or subcontractors, not employees, for work done on behalf of a business. These costs are deductible business expenses.
- Definition: Independent contractors hired for projects or tasks.
- Reporting: Entered under Contract Labor on Schedule C.
- Tax forms: Issue a 1099-NEC (or 1099-MISC before 2020) if payments exceed $600.
- Deductions: Reduces taxable income as a business expense.
- Difference from wages: Contractors get a 1099; employees receive a W-2.