You’ve got crews clocking in from four jobsites, three union classifications, and one incorrect timecard could trigger a chain reaction of wrong wages, blown budgets, missed WH-347 compliance. Sound familiar?
Payroll in construction isn’t like payroll in retail or tech.
With numerous regulations, constantly changing workloads and job sites, and unreliable connectivity, general contractors can’t rely on just any payroll system to get the job done.
The wrong system can lead to payroll delays and budget issues. Payroll mistakes are costly and can cause a ripple effect of compliance fines, job costing inaccuracies, or frustrating delays.
Not all payroll software is built for construction — and choosing the wrong one can cost you. Below, we’ll explore why construction payroll is so complex and the features general contractors should look for in a payroll system, like hh2 Remote Payroll.
Payroll in any company and industry brings challenges, but construction payroll is especially complicated.
To start, construction brings variability in labor, location, and task — often changing every day. Employees and teams can work at a different job site every day or week and bounce between different schedules, tasks, and types of work — all of which need to be coded and processed differently for payroll. Time also needs to be allocated to cost codes and job numbers. It’s not just a matter of knowing who is working where but applying the right codes to their payroll. Those codes have a ripple effect on job costing and future budgets, so accuracy is crucial.
With teams and employees working at various job sites, gathering accurate time data can be challenging. Many construction sites are remote, so it can be difficult to collect real-time time-tracking data. Many companies still rely on outdated manual time tracking and data collection because of the complexities, but those practices open the door to delays and errors.
Construction also faces many payroll regulations. Union employees under collective bargaining agreements (CBAs) must have the wages and working conditions set in their contract. A general contractor can work with employees in many different unions, each with a unique CBA, and must process payroll accordingly. Projects funded by the government also must comply with prevailing wage laws, including pay rates that may differ from those in other projects. Certified payroll requirements, such as form WH-347 and state formats, require additional calculations and coordination.
All this is to say that construction payroll is incredibly complex and nuanced. Regardless of whether a general contractor is managing payroll for five employees or 500, managing these complications can be difficult.
Even with all the complexities of construction payroll, many general contractors will opt for generic payroll software. And while this basic tool may seem to get the job done at first, it can lead to difficult processes and regulatory challenges along the way.
If any of these red flags sound familiar, it’s time to switch from general payroll software to a system designed for construction:
It doesn’t handle job costing or multiple pay rates
Payroll doesn’t just affect current projects —it also impacts budgets and projections for future projects. If your payroll system can’t handle job costing, it can seriously impact the accuracy of future budgets, which can hurt your planning.
It requires manual data transfer from timekeeping systems
Moving data manually between systems is repetitive and time-consuming, not to mention it creates opportunities for errors to occur. A payroll platform that requires manual data entry is slowing you down, which limits how fast you can process payroll.
It doesn’t integrate with ERPs
General contractors typically use multiple systems to track their business. But if a payroll system doesn’t integrate with an enterprise resource planning system like Sage 300, Vista, or Foundation, you’re missing out on crucial insights.
It doesn’t support certified payroll reporting or union deductions
One of the most common challenges of construction payroll is union and certified wages. A system that doesn’t support these complications means contractors have to perform manual calculations or risk falling out of compliance with inaccurate wages.
Even switching to a construction payroll system isn’t a guarantee that the software will automatically fit your needs. When considering payroll software options, look for these key features:
hh2 Remote Payroll is a cloud-based, secure, and scalable platform trusted by over 3,600 contractors. Built specifically for construction, our software provides all the tools and support general contractors need to streamline payroll.
“We used to spend 15 hours a week fixing timecards. Now, payroll is done before lunch — accurate, compliant, and approved.” - Controller, Mid-Sized GC in Texas
If you're self-performing work and managing complex labor, the right payroll software isn’t optional — it’s foundational. hh2’s Remote Payroll can transform how you process and calculate payroll, ensuring accuracy and efficiency. hh2’s Remote Payroll is a purpose-built solution for GCs who self-perform work and need to integrate field data, labor classifications, compliance, and ERP syncing.
Stop settling for software that wasn’t built for your business. Discover how hh2’s Remote Payroll simplifies construction payroll from the field to the back office. Explore Remote Payroll.