How to Do Construction Payroll: A Step-by-Step Guide
Construction payroll is harder than office payroll because the work moves. Crews split across job sites, hours roll up by project and phase, public jobs carry prevailing-wage and certified-payroll obligations, and a single pay period can mix salaried staff, hourly crews, and 1099 subs. Here is the step-by-step.
Track crew hours by job site
Capture clock-ins and clock-outs tied to the right project and phase. On multi-site jobs, geofenced GPS clock-ins remove the guesswork about who was where, and feed accurate hours straight into payroll. This is what dedicated construction payroll software automates.
Classify workers and pay rates
Separate W-2 employees from 1099 subcontractors, and set prevailing-wage vs standard rates by trade and locality. Misclassification is one of the most expensive construction payroll mistakes.
Apply overtime and prevailing-wage rules
Apply federal and state overtime (including daily overtime where required), Davis-Bacon wage determinations, and the fringe-benefit component for public jobs. Try our payroll calculator to estimate gross-to-net for a crew.
Calculate gross-to-net
Calculate wages, taxes, and deductions, then reconcile labor against your job-cost budget so a blown estimate shows up before the job closes, not after.
File certified payroll
For public construction projects, submit a weekly WH-347 (or your state's equivalent) certified-payroll report proving prevailing wages and fringes were paid.
Remit and report
Pay and file payroll taxes, or export clean payroll-ready data to the payroll provider or CPA you already use. MyCo prepares and calculates the numbers; it is not a tax filer, so the filing stays with your provider or our CPA partner.
Built for construction
See MyCo run construction payroll in a 20-minute demo
GPS job-site time, prevailing-wage prep, certified payroll, and job costing in one app.
Book Your Free Demo →FAQ
What is certified payroll?
Certified payroll is a weekly report (federal form WH-347 or a state equivalent) proving you paid prevailing wages and fringe benefits to workers on a government-funded construction project.
Does construction payroll software file taxes?
Most construction payroll software, including MyCo, prepares and calculates payroll but does not file taxes itself. MyCo exports payroll-ready data to your payroll provider, or connects you to a CPA partner who files.
How is prevailing wage different from minimum wage?
Prevailing wage (Davis-Bacon) sets a locality- and trade-specific wage floor on public construction projects, usually well above the standard minimum wage, and includes a fringe-benefit component.