Tech Support
By Mike Ode
Payroll: One Size Does Not Fit All
Learn how construction-specific payroll services can save you time and money.
F
ace it: Payroll processing is
a pain for many contractors.
Especially given the complexities of construction payroll—including
varying rates for contractors working on
multiple jobs in multiple states and localities—this can be an incredibly timeconsuming process. Also, governmentsanctioned projects add a whole level of
complexity to the process, with different
pay rates, fringes and reporting. It’s no
wonder that the office staff cringe when
the time comes to process payroll. But,
there is a solution that could offer savings to contractors looking for a better
way to handle payroll: constructionspecific payroll services.
Construction payroll is different from
that of any other industry, so why do
contractors routinely outsource their
payroll to general payroll providers?
While big-name providers offer the
basics—checks, direct deposit and
tax services—they often can’t directly
handle the unique complexities involved
with processing construction payroll.
Construction-specific payroll services,
however, understand the industry and
were built to handle the payroll tasks
that come with construction.
Fringe Benefits
When working on a prevailing wage job
or a union job, construction companies
are required to pay fringes. Typically,
these companies are also required
to track and report fringes separately
from wages. However, calculating and
tracking these fringes manually can
be difficult. Construction payroll services can automatically calculate fringe
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distribution and produce the reports
contractors need.
Construction-specific payroll services also have the ability to integrate with
third-party fringe distribution services.
Contractors save money when they sign
up with a benefit plan because they are
not required to pay taxes on fringes paid
to a third party. Through this integration
along with detailed tracking information
and reporting capabilities, construction
business owners can be sure that their
employees’ fringes are being distributed properly.
Pay Rates
In any given pay period, a construction
business owner may have employees
working on multiple jobs in multiple
states and localities—all with varying
pay rates. Keeping track of different
pay rates for all employees on a given
construction business owner January 2013
crew can be difficult to do manually,
but construction-specific payroll
services can simplify the process.
When entering time, contractors
working with construction payroll services simply specify which job employees
are on, and their pay rates are applied
automatically, based on the job and the
trade. This is especially useful when
construction companies are working
on a variety of jobs. For instance, when
employees work on prevailing wage
jobs, their pay rates may differ from their
standard rates. In addition, fringes may
be built into the pay rate, which further
complicates manual tracking. With a
construction-specific payroll service, all
of these calculations are automated, so
contractors don’t have to worry about
entering the wrong pay rate.
Construction-specific payroll services also allow for other types of
Construction payroll is different from that of any other industry, so why do
contractors routinely outsource their payroll to general payroll providers?
automation. For example, instead of requiring that users enter workers’ compensation classes for each employee,
job and task, many services allow workers’ compensation to be automated
based on the state, task and other variables. When an employee is clocked in,
the workers’ compensation class will be
applied automatically.
Reporting
When it comes to construction payroll,
reporting is essential. Whether it’s tracking labor costs, submitting certified payroll reports, handling union reporting or
tracking workers’ compensation, reporting remains a critical aspect to running a
successful construction business.
Union reporting and tracking is often
provided as well as certified payroll reports for contractors performing prevailing wage work. New hire, EEO minority
compliance and workers’ compensation
reports are just a few other reports that
many construction payroll service providers can supply. Having these instant
reporting options available increases
efficiency, allows contractors to better
track their labor costs and opens up job
opportunities.
The Benefits
One of the most obvious benefits of using a construction payroll service is that
it saves time. Timecard entry is easier,
as most of the data defaults in. Handling
multiple states and localities on one
timecard can be done effortlessly, and
many construction-specific payroll services also offer mobile solutions to make
entering time from the field easy and
efficient.
Another way that contractors can
save time is by importing data from
third-party
time-tracking
software.
Some construction payroll services are
able to integrate with accounting software packages to reduce double entry
and the risk of error. And it’s easy to
produce recurring timecards for those
members of staff whose timecards are
the same each pay period.
Finally, construction payroll services
take care of filing taxes, act as a company’s representative if there are any
discrepancies and help create an audit
trail as a reference.
Payroll services with a focus on construction exist for a reason: to give
contractors a more tailored option than
payroll providers that serve multiple industries. Construction-specific payroll
services fit the bill for many contractors
looking to outsource the process so
they can focus on growing their business. CBO
Mike Ode is the president of Payroll4Construction.com, a payroll service
provider for construction businesses. Ode can be reached at mode@
payroll4construction.com or 800-949-9620. For more information, visit
www.payroll4construction.com.
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