Need help spending less time on payroll problems every week?
Payroll can be frustrating. When you’re dealing with multiple job sites, union rates, seasonal employees… it’s easy to feel overwhelmed.
And most construction businesses are losing time and money to payroll chaos.
But there’s good news.
Construction payroll software makes light work of the tedious stuff. That means your team can spend less time on payroll and more time doing what they do best… running your business.
What you’re going to discover:
- Why Construction Payroll Requires Special Handling
- How Much Time You’re Losing with Manual Processes
- Features Every Business Needs
- What to Look For in Construction Payroll Software
Why Construction Payroll Requires Special Handling
If you’ve ever had to process construction payroll… you know it’s not like most other types of payroll.
Employees move from site to site every day. Pay rates shift based on job type. Overtime rules vary by location. And prevailing wage requirements can be a nightmare.
Don’t even get me started on…
- Multiple pay rates for different crafts or certifications
- Tracking union benefits
- Certified payroll for public projects
- Multi-state unemployment and tax filings
- Seasonal labour
When you break down all the complications of construction payroll… it’s easy to see why having the right construction company payroll software is so important. You can’t just pick a “one size fits all” solution.
In fact…
Despite all the complexity… many construction firms are still processing payroll manually. QuickBooks shared that over 34% of construction companies still use manual spreadsheets to complete their payroll. Yikes!
How Much Time You’re Losing with Manual Processes
Did you know spending hours on payroll each week actually costs your business money?
Of course it does. Consider…
- Time spent entering data
- Hours correcting mistakes
- Lost sleep reconciling timesheets
But did you know there are hidden costs too?
Okay let’s say you don’t bother tracking any of this stuff. How about the price you pay when…
- Employees get misclassified. One national construction company recently had to pay $3.75 million to settle a class action lawsuit related to employee misclassification. Ouch!
- Payroll mistakes are made. Construction paysheets have lots of room for error. With multiple job sites, varying pay rates for different employees, complex overtime calculations … you name it. Mistakes happen. And they cost money.
Depression is setting in yet?
Employee stress is another hidden cost of sloppy payroll. Studies show payroll professionals rank stress as one of the highest in their job. And when overworked employees leave your company… your remaining staff has to spend more time training them up.
Which brings us back to lost productivity.
Features You Should Never Live Without
Sorry to burst your bubble. But not all payroll software is created equal.
When you’re comparing payroll platforms, look for these features specifically designed for construction…
Job Costing
This is a big one. Every hour your crew works needs to be captured on a job with cost codes attached. If you don’t have control over job costing, projects can easily go over budget without anyone knowing until it’s way too late.
Look for construction payroll software that automatically allocates labour expenses to the correct jobs. This allows project managers to see exactly where every dollar is going on a project.
Certified Payroll
Does your company bid government projects? If so, you’ll need certified payroll.
Each week you’ll need to prove you paid your employees in compliance with prevailing wage laws. This is called certified payroll. It’s typically reported on a specific DOT certified payroll form.
Filling out these forms manually increases risk of getting fined or barred from future government work. Construction payroll platforms automatically fill out these forms with info pulled from timesheets.
Multi-State Tax
Construction crews work in multiple states all the time.
And each state has different tax rules, withholdings, and filing deadlines. Trying to manage multi-state tax compliance manually is nearly impossible.
Payroll software automatically calculates accurate taxes for every employee based on current rates/rules by jurisdiction.
Union Management
Want another thing that’s unique to construction? Unions.
Each union has different locals. Each local has different benefits contributions and job classifications. Union dues are calculated using specific formulas.
Luckily construction payroll systems can automatically track all of this data for you. Write-offs are calculated correctly and paid to the various union funds. Any reports your company needs can be generated automatically too.
What to Look For in Construction Payroll Software
Finding the perfect payroll platform for your business can seem daunting. How do you know you’re making the right choice?
Here’s what I look for before recommending software to clients…
Must Haves
- Supports certified payroll (if you bid government contracts)
- Allows for multiple pay rates/job classifications
- Integrates with your timekeeping system
- Offers mobile capabilities
Nice-to-Haves
- Offers direct deposit/pay cards
- Has employee self-service functionality
- Allows custom reports
- Scalable as your business grows
Software can reduce payroll errors by a whopping 31%. That’s according to recent payroll statistics from customer review site G2. When you consider how much time is wasted on manual payroll processing… improving accuracy isn’t just nice to have. It will save your business money!
Implementation is key too.
Just because a software company offers construction payroll doesn’t mean they understand it. When speaking with vendors ask how familiar their payroll team is with construction specific issues. You should also ask about training materials and options.
Cloud vs On-Premise
This really is a you decide kind of deal.
Cloud payroll software allows teams to access your payroll from anywhere with an internet connection. Apps make it easy to see employee paystubs on mobile devices. Software updates are automatic. And you typically pay a monthly subscription price.
On-premise software is installed on your company’s servers. Large companies with plenty of IT resources tend to prefer this setup.
Wrapping Up
You don’t have to lose sleep over construction payroll.
Implementing construction payroll software allows you to turn payroll from a headache into a well-oiled machine. Done right, you’ll eliminate manual errors, maintain compliance, and regain control of your payroll department.
Review:
- Construction payroll is complicated
- Pain points include job sites, employee classification, multiple rates
- Software saves time with features like job costing, certified payroll, and more
- Consider cloud-based software for flexibility
Don’t waste another minute trying to control payroll with spreadsheets. Shop around and find construction payroll software that fits your business needs.
Construction companies who take advantage of construction payroll software are kicking other companies who “wait until it happens to them” to the curb.