Cost by Industry / Construction

Construction payroll cost: certified payroll, prevailing wage, and multi-state field operations

Construction payroll is among the most compliance-heavy categories in the payroll service market. Certified payroll under the Davis-Bacon Act requires weekly WH-347 reports. Prevailing wage rates vary by trade and county. Multi-state field operations multiply SUI registration and filing burdens. Union operations require multi-fund remittance and reporting. Workers' compensation rates exceed 10 percent of payroll for many trades. This page works through provider options across these complications and explains where each genuinely earns its cost.

Six provider options at 30 construction employees

Monthly cost for full-service payroll covering 30 construction employees with prevailing wage and certified payroll requirements. Pricing as of 16 May 2026, with construction-specific providers (Foundation Software, eBacon) priced from public buyer reports and partner integrations.

Provider	Monthly at 30	Notes
Paychex Flex Pro	$425	Native certified payroll (WH-347), prevailing wage by trade, strong union support.
ADP Workforce Now (est.)	$700	Quote-based mid-market. Strong compliance depth, certified payroll, union admin.
Foundation Software	$600	Construction-specific payroll plus accounting. Built for prevailing wage compliance.
eBacon	$350	Construction-specific certified payroll specialist. Integrates with most payroll providers.
OnPay	$229	Generalist with native multi-pay-rate. Certified payroll via add-on or manual.
Gusto Plus	$440	Multi-state and multi-pay-rate handled. Certified payroll requires manual workaround.

Certified payroll and the WH-347 weekly grind

The Davis-Bacon Act and Related Acts (DBRA) require contractors and subcontractors on federally-funded construction projects above $2,000 to pay prevailing wages and submit weekly certified payroll reports. The Federal WH-347 form requires every employee's name, address, social security number, work classification, hours worked broken out by classification, hourly rate paid versus prevailing rate, gross wages, deductions, net pay, and a signed sworn statement of compliance with prevailing wage requirements.

For a 30-person construction firm working on 3 federally-funded projects simultaneously, that is 3 WH-347 forms per week, each with 10 to 30 employee lines. Without payroll provider automation, preparing these forms takes a payroll clerk 4 to 8 hours per week. Paychex Flex Pro, ADP Workforce Now, Foundation Software, and eBacon generate WH-347 automatically from payroll data. The time savings versus manual preparation is roughly 200 to 400 hours per year, worth $10,000 to $30,000 in labour cost at $50 to $75 per hour.

This is why construction firms with significant prevailing wage exposure rarely choose Gusto Plus or OnPay despite their lower headline pricing. The manual workaround cost exceeds the price difference within the first year of operation on federal contracts.

Prevailing wage complexity by trade and county

Prevailing wage rates are set by the US Department of Labor for federal projects and by individual states for state-funded projects. The rates vary by trade classification (laborer, carpenter, electrician, plumber, ironworker, operating engineer, and many subspecialty trades within these), by county or wage determination area, and update periodically through wage determinations. A single project may have 8 to 15 different trade classifications with 8 to 15 different prevailing rates plus separate fringe benefit rates.

A single employee may also work in multiple classifications on the same week (a laborer who operates equipment for part of the day must be paid at the higher of the two prevailing rates for those hours). Tracking this requires either specialised construction payroll software or detailed manual timesheet coding. Foundation Software and Paychex Flex Pro handle this with native trade classification support and automatic prevailing wage application based on project and county codes.

Multi-state field operations and SUI complexity

Construction firms with mobile crews working across state lines face multi-state employer obligations: SUI registration in every state where work occurs, state income tax withholding (which complies with each state's nexus rules), local tax registration in some states (Pennsylvania, Ohio, Alabama have local income taxes), and state-specific reporting requirements. For a firm working in 5 states across a year, that is 5 SUI registrations, 5 state tax filings quarterly, and ongoing tax deposit obligations to each state.

Generalist payroll providers handle multi-state but at varying levels of automation. Gusto Plus and OnPay include multi-state at their standard prices but require manual state-by-state setup. ADP Workforce Now and Paychex Flex Pro automate multi-state setup through their compliance teams. For construction firms regularly operating in 5+ states, the specialised compliance team support pays for itself through reduced internal administrative time.

Union construction and the multi-fund remittance overhead

Unionised construction operations require ongoing remittance to multiple union funds: pension fund contributions, health and welfare fund contributions, apprenticeship and training fund contributions, vacation fund contributions in some trades, and union dues deduction and remittance to each local union. A 30-employee union construction firm may have employees across 4 to 8 different union locals across different trades, each with separate remittance schedules (typically monthly), separate reporting requirements (typically electronic reports in trade-specific formats), and separate contribution rates that update periodically per CBA.

The administrative time for union remittance and reporting without specialised provider support is meaningful: 8 to 20 hours per month for a 30-person union firm. ADP Workforce Now, Paychex Flex Pro, and Foundation Software automate most of this through native union administration. Construction-specific providers are typically the best fit for heavily unionised operations because the entire product is built around CBA administration.

Workers' compensation: the elephant in the room

Construction workers' compensation premiums are among the highest in any industry. Class codes vary by trade: general carpentry typically 8 to 12 percent of payroll, roofing 20 to 35 percent, steel erection 15 to 25 percent, electrical 6 to 10 percent, plumbing 5 to 10 percent. For a 30-employee firm with $2 million payroll mixed across these trades, workers' comp typically runs $200,000 to $400,000 annually.

PEO pooled-risk pricing through Paychex PEO or ADP TotalSource can reduce workers' comp premiums by 10 to 25 percent versus standalone broker pricing for higher-risk trades. For a roofing contractor with $50,000 monthly payroll on a 25 percent base rate, that is $1,250 to $3,125 monthly in workers' comp savings. The PEO platform fee of 3 to 8 percent of payroll ($1,500 to $4,000 monthly) often offsets the workers' comp savings, making the PEO conversation more complex than just workers' comp pricing. Run the full math before committing.

Where to go next

Healthcare payroll cost

Different compliance overhead, similarly multi-rate.

Paychex Flex cost

The strongest generalist option for construction.

Paychex PEO cost

PEO option with strong construction industry positioning.

Multi-state payroll cost

The compliance overhead that hits construction hardest.

Construction payroll cost FAQs

What makes construction payroll fundamentally different?

Three layers. First, certified payroll on federally-funded projects under the Davis-Bacon Act requires weekly WH-347 reports with employee-by-employee wage breakdowns by trade classification. Second, prevailing wage rates set by trade and by county vary across projects, so a single employee may earn different rates on different days. Third, multi-state field operations are common: a 30-person construction firm may have employees working in 3-10 states across a year, each with its own SUI registration and tax filing requirements. These compliance layers require either specialised construction payroll providers or generalist providers with strong construction modules.

What is certified payroll and what does WH-347 require?

Certified payroll is the weekly compliance report required for contractors and subcontractors on federally-funded construction projects above $2,000 (per the Davis-Bacon Act). The Federal WH-347 form reports each employee's name, social security number, work classification, hours worked at each classification, hourly rate paid versus prevailing rate, gross wages, deductions, and a sworn statement of compliance. Many states require additional state-specific certified payroll on state-funded projects. Without provider automation, generating WH-347 weekly takes 2 to 4 hours per project per week.

Which payroll provider is best for construction?

Paychex Flex Pro for general construction firms wanting integrated payroll plus HR plus union admin in a single platform. Foundation Software for firms that want construction-specific accounting plus payroll integrated. eBacon as a specialist certified-payroll layer that integrates with existing payroll. ADP Workforce Now for larger mid-market construction firms (50+ employees) with complex multi-state and union operations. OnPay or Gusto Plus only for smaller construction firms without significant prevailing wage exposure.

How does union payroll change the cost?

Unionised construction operations require collective bargaining agreement (CBA) administration: union dues deduction and remittance, pension fund contributions, health and welfare fund contributions, apprenticeship fund contributions, and reporting to multiple union locals across trades. Each union local typically has different rates, different remittance schedules, and different reporting formats. Generalist payroll providers handle union dues deductions but the multi-fund remittance and reporting is where construction-specific providers earn their premium. Add 30 to 50 percent to baseline payroll provider cost for union construction operations.

What about workers' comp for construction?

Construction workers' compensation is among the highest-rate categories in any state. For general carpentry the class code rate is typically 8 to 15 percent of payroll. For roofing or steel erection, rates can exceed 25 percent. For a 30-employee construction firm with $2 million annual payroll, workers' comp can run $160,000 to $750,000 per year depending on trade mix and state. Pay-as-you-go integration through payroll providers improves cash flow but does not change the absolute premium. The PEO model (Paychex PEO or ADP TotalSource) can offer pooled-risk pricing that reduces premiums by 10 to 25 percent for higher-risk trades.

How does multi-state field operation change cost?

Each state where construction work occurs requires SUI registration, state income tax withholding, possibly local tax registration, and state-specific certified payroll formats on state-funded projects. A construction firm working in 5 states pays roughly 5x the state registration setup cost plus ongoing per-state filing time. Specialised construction payroll providers automate this multi-state work. Generalist providers handle it but with more manual configuration. For chains operating in 10+ states regularly, the specialised provider premium typically pays for itself through reduced compliance staff time.

Is PEO a viable option for construction firms?

Yes for many construction firms above 25 employees, particularly because workers' comp pooled risk pricing through PEOs can substantially reduce premiums versus standalone broker pricing. Paychex PEO has historically positioned strongly in construction. ADP TotalSource is competitive for higher-headcount mid-wage construction operations. The trade-off is the PEO platform fee, which adds 3 to 8 percent of payroll. For high-risk trades where workers' comp savings of 10 to 25 percent on a 15 percent base premium translate to 1.5 to 3.75 percent of payroll, the PEO often pays for itself on workers' comp alone.