In the construction industry, it’s important to find a payroll service that understands the unique complexities of your business. From prevailing wage work to certified payroll, you need assistance to handle the nuances of your company’s specific needs.
The best service will simplify your company’s payroll process while making complying with labor and tax laws easier. This guide will cover the specialized features that your company may require, such as union tracking and gpt44x amazon job costing reports.
Union tracking is a complex and challenging aspect of construction payroll processing. It includes the traditional gross wage calculations and additional deductions and fringe benefits like political action contributions, health care and pension funds. In addition, it’s not unusual for contractors to work in multiple jurisdictions and have to keep track of their local union requirements and those of the workers they’re hiring in a particular jurisdiction.
The best payroll service for construction can help simplify this process by streamlining the workflow and eliminating the need for manual data entry. This allows for more time to be spent on the core business.
In addition to reducing payroll-related costs, working with a third-party partner can help reduce the risk of costly penalties associated with missed filing deadlines or miscalculations in labor reporting and compliance management. Companies that outsource their payroll save 18% on average on their overall expenses.
With all the complexities of the construction industry, it’s easy for companies to make mistakes when handling their payroll. Unfortunately, these errors can seriously affect worker morale and productivity. That’s why using a construction-specific payroll solution or provider is important to handle the complex requirements of prevailing wages, certified payroll, union tracking and reporting, and workers’ compensation.
Job costing is an accounting method that breaks down the costs of labor, materials, and overhead costs on individual projects. It’s an ideal tool for construction companies because it lets you see where profits are made or lost on each contract. It’s not as useful for businesses that provide standardized services, like grocery stores or catering firms. Still, it’s an essential tool for contractors relying on long-term contracts that span months or years of work and wayne liang variable project costs.
Labor is typically the most significant project cost for construction companies. For example, a contractor may need to track the hours employees work on each project and ensure they’re meeting budget estimates. In addition, many construction jobs require equipment that must be accounted for. For this reason, your job costing system must integrate a time-tracking platform to allow employees to log their progress on each task easily.
Material and overhead costs are also significant. For instance, your business might need to rent or buy equipment that must be accounted for in the price of each project. In addition, you’ll need to factor in the indirect costs of running your business, like internet bills, office supplies and utilities. Accurate data and insight into these costs are vital to keeping your construction company profitable.
Prevailing wages are the hourly wage rate paid to workers on a construction project based on the labor market in a local area. These rates apply to Federally funded public works projects, including new construction, repairs, and renovations of buildings and highways. Contractors who work on such projects must submit certified payrolls to the government. These payroll forms are available from the Department of Labor for each state. In addition, there are software programs that make the process of calculating and reporting on prevailing wages easier for contractors.
The Davis-Bacon Act of 1931 requires that contractors on Federally funded construction projects pay their employees a wage that is at least the average wage in a local area. The civic-minded reformers who pushed for this legislation believed the government should not use its buying power to drive down wages. But critics argue that prevailing wage laws increase government costs by artificially inflating contract prices.
For example, a Center for Government Research study estimates that prevailing wage laws raise construction costs in New York by 36%. This figure was based on the difference between market wage rates for construction occupations in several metropolitan areas and wage determinations made by the Department of Labor’s Occupational Employment Survey. The study also assumed that labor costs remain constant on all projects and exclude other construction-related expenses such as land acquisition, architectural design, or management fees.
If you work on federally financed construction projects as a contractor or subcontractor, you must submit certified payroll records weekly to prove that you’re paying your employees fairly. This system involves strict rules that are important to remember to avoid penalties and legal issues.
Certified payrolls are accounting records of almost everything paid to your workers on a specific project for a government customer. The goal is to provide the government with a way to ensure contractors pay their workers “prevailing wages” in conformity with the law. These are typically the local average wages for a particular type of employee in a region like a county or a large metro area.
You can automate gathering information and create reports for local, state and federal submissions using an online certified payroll reporting solution. This frees up your time to focus on other business aspects while ensuring you comply with all local, state and federal wage laws.
Many complicated rules can get confusing when tracking labor costs and calculating prevailing wages, especially for newcomers. To minimize the risk of mistakes, consider partnering with a qualified and experienced company familiar with the unique complexities of construction payroll. They will have the expertise to help you manage all your Certified Payroll obligations and prevent costly penalties, back payments or fines.