If you are a construction company that is working on government-funded construction projects as a contractor, you should understand the payroll reporting requirements that you are subject to. Certified payroll records are not overly complicated, but they do need to be accurate in order to maintain compliance. What should construction contractors know about payroll reporting?
What Is Certified Payroll?
Certified payroll uses a special payroll report called Form WH-347. This form is required for all construction contractors who are working on government-funded projects, and it’s designed to prove that you are paying your workers a fair wage for the amount of work that they are doing. This has been a requirement for many decades, and all construction contracts that are over $2,000 are included.
When Do You Need to Submit Certified Payroll?
Construction contractors or subcontractors who are working on federally-financed or assisted construction contracts over $2,000 in total cost are covered. This can include a broad range of things, including public works projects or public school projects. Some of the activities that can be included include:
- Painting
- Electrical work
- Drywall work
- Plumbing
- Cleaning
- And more!
How Can You Comply with Payroll Reporting Requirements?
First, you need to make sure that you are paying all of your employees the prevailing wage locally for the type of work that you are doing. That means that your wages will be compared to wages for similar projects in the area. How can you find the prevailing wage for your area? The US Department of Labor has lists of wage determination resources that can show you the prevailing wage rate and fringe benefits that are expected. If you are one of the construction contractors on a federal project, you cannot pay less than the prevailing wage and fringe benefits.
When you submit your Form WH-347, you will need to include information about your employees, including:
- Names
- Gross and net wages
- SSNs
- Fringe benefits
- Hours
- Job titles (carpenter, electrician, plumber, etc.)
- Withholdings
On the form, you will also need to sign a compliance statement that verifies the information on it.
Get the Reporting Help You Need for Your Construction Company with MKS&H
MKS&H provides tax and accounting services to businesses of every size and in every industry, including construction. We can work with you to improve your company and make sure that it is financially secure now and in the future. Contact us today for a consultation.
About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.
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