Construction Payroll Services
Construction payroll has three jobs. Pay people correctly and on time. File and pay the taxes in every state where the work happened. And post what each hour cost to the job it was worked on, so the job cost report is not a guess.
Multi-state, as a matter of course
A crew that works across a state line triggers payroll registration in the state where the work is performed, not just where the office is. Unemployment insurance, withholding, sometimes local taxes, and a workers’ comp policy that covers the right states. Most payroll providers will register you in a new state if you ask; few will notice that you should have.
Your bookkeeper already runs payroll for companies in several states. Registration for a new state is part of the service, and your bookkeeper will ask, at setup and when a job is bid out of state, whether any of your people will be working there.
Burdened labour, posted to the job
A wage is not what an hour costs. Employer payroll taxes, workers’ comp premium, any benefits and paid time off sit on top, and in construction the workers’ comp component alone can add ten to thirty percent depending on the class code. A job cost report that shows wages without burden understates labour on every job, and an estimator who bids off that report underprices every job.
Your bookkeeper posts labour to jobs at the burdened rate, by cost code, from the time records your crew leads already keep. If your field software captures time by job, that feeds the payroll; if it does not, a simple weekly sheet does.
Workers’ comp class codes and the audit
Premiums depend on which class code each employee’s hours fall under, and a carpenter who also does roofing is two codes with very different rates. Payroll records that split hours by class are what make the annual workers’ comp audit a formality rather than a bill. Your bookkeeper keeps them that way and prepares the audit package when the carrier asks.
Overtime, prevailing wage and per diem
Overtime in construction is routine and the rules have corners: weekly overtime is federal, daily overtime exists in some states, and a blended rate applies when someone works at two pay rates in a week. Per diem for travelling crews has its own rules about what is taxable. Your bookkeeper handles the standard cases and flags the ones that need a decision.
Prevailing-wage work adds a weekly reporting layer on top of all this: the certified payroll reports and fringe calculations that federally funded and public jobs require. If that is part of your business, say so in the request so the payroll setup and the reporting are planned together from day one.
Subcontractors and 1099s
Subs are not payroll, but they live next to it. Your bookkeeper collects W-9s before the first payment, tracks payments by sub through the year and prepares the 1099-NEC forms in January. Note the reporting threshold rose from $600 to $2,000 for payments made from 2026 onward, with indexing after that. Your bookkeeper also flags the sub who looks a great deal like an employee, because that question is better asked in April than in an audit.
How it runs week to week
- Hours by job and cost code from your time records, weekly or biweekly
- Payroll processed, direct deposits sent, pay stubs delivered electronically
- Federal and state taxes paid and filed on schedule in every state involved
- Labour posted to jobs at burdened cost in the accounting file
- Quarterly filings, year-end W-2s and 1099-NECs, and the workers’ comp audit package
What it costs
Payroll is usually quoted alongside bookkeeping rather than alone, and the combined engagement starts at $250 a month. The payroll component scales with headcount, pay frequency and the number of states. A company with six people in one state is a modest addition; twenty people across three states is more. The cost guide gives ranges.
Say how many people you pay, how often, and in which states. Payroll is quoted alongside the bookkeeping within a business day.
Common questions
Do they run payroll in my state?
Yes, in any state. Registration for a new state, when a crew starts working there, is part of the service.
What about prevailing-wage jobs?
Mention them in the request. Prevailing-wage work changes how hours, classifications and fringe are recorded and reported, and the setup is planned around it from the start.
Can payroll hours flow from my field software?
Often. If your software records time by job, it can feed payroll and the job cost posting. If not, a weekly time sheet by job is enough.
What about workers’ comp?
Your bookkeeper keeps hours split by class code so the premium calculation and the annual audit are straightforward, and prepares the audit package. The policy itself is between you and your carrier.
Do they handle 1099s for my subs?
Yes: W-9 collection, payment tracking through the year and 1099-NEC preparation in January, at the current reporting threshold.
Can they take over payroll mid-year?
Yes. Year-to-date figures are brought across so W-2s are correct, and the handover is timed to a pay period boundary.
Related services
- Construction Bookkeeping Services
- Contractor Bookkeeping for Trades and Service Companies
- Job Costing and WIP Reports for Contractors
- Construction Bookkeeping Cleanup and Catch-Up
Who we work with
Request a quote for construction payroll
Tell us about the company and the state of the books. Your bookkeeper replies within one business day with a plain answer: what it would take, and what it would cost. Requests answered within one business day · Calls Mon–Fri, 9am–5pm Eastern Or call (888) 720-4009 if you would rather talk it through first.