Best Construction Payroll Software of 2025

Here's what we'll cover:

What is construction payroll software?

Features of payroll software

How to choose the right construction payroll software

Understanding payroll market trend

Construction payroll software essentials 

Construction payroll software automates the management of workers' salaries, wages, bonuses, and deductions. These tools can also track PTO, time off, vacation accrual, benefits, and retirement accounts.

Small business human resources (HR) managers use construction payroll software to automate the process of managing multiple payroll tasks, including direct deposit, current payroll costs and labor compensation reports. It helps them comply with union policies, tax withholding and labor pay regulations.

Payroll software is typically priced on a “per month” basis, starting at $41 for basic systems. [1] More advanced platforms can cost upwards of $23,000 as they often require customizations for larger teams.

First-time buyers should consider budget, number of users, specific use cases, and necessary integrations. Consulting stakeholders to determine key questions for vendors can help find the best system. Questions for vendors may include:

• Does this tool enable users to track pertinent metrics to create payroll reports?

• Does this tool provide alternate methods of tracking hours worked and attendance, such as facial recognition or geofencing?

• How will this tool help me comply with union policies, tax withholding, and labor pay regulations?

• What level of technical support will I need from the payroll software provider?

Because there are 178 different construction payroll vendors on Software Advice, choosing the right option can be a long process. In this guide, you’ll learn the essential components of construction payroll tools and get step-by-step guidance on how to choose the right tool for your business. If you’d prefer to chat with one of our experienced medical software advisors, such as Steven Burlison and Ryan Eschenburg—who have led buyers to the right software over a combined 17 years—schedule a call or start a chat with us.

What is construction payroll software?

Construction payroll software helps small business human resources (HR) managers automate the process of managing multiple payroll tasks, including direct deposit, current payroll costs and labor compensation reports. It helps them comply with union policies, tax withholding and labor pay regulations.

Payroll software for construction can also integrate with various leave management and time tracking functionality/tools to accurately calculate employee wages, bonuses and overtime, as shown in the example below.

Time tracking function shown in construction payroll solution WorkMax TIME

General contractors, house builders, and government contractors are the most common buyers of construction payroll software. Read on for use cases specific to these buyer types:

General contractors and house builders. These buyers need cloud-based payroll software to manage on-site employees. The software should be able to include 1099 contractors, manage rents, pay royalties and calculate federal withholding taxes.

These buyers also need to comply with Internal Revenue Service (IRS) rules and regulations related to vendors and independent 1099 contractors.

Government contractors. Public and government contractors have unique asks from their payroll calculation and compliance management systems. As these contractors are usually under scrutiny, they need to ensure accuracy and strictly adhere to the industrial dearness allowance (IDA) and central dearness allowance (CDA) payroll structures.

They also need to provide performance-related pay (PRP), with applicable government policies and conditions. Therefore, these buyers need software that offers a high level of automation, documents payroll records accurately and is customizable. These will ensure that employees are paid as per various special allowances.

Features of payroll software

All payroll software tools include payroll management, payroll reporting, and tax compliance features. Most share a variety of common features such as benefits management, check printing, compensation management, compliance management, and direct deposit.

Core payroll software features

Each year we speak to dozens of construction payroll users and have analyzed those conversations to give you a better understanding of which features are most critical. [2]

Common payroll software features

Other payroll software functions relevant to construction professionals

There are a number of functions that may not be found in every payroll software system but that are worth mentioning because they are commonly requested by the construction payroll shoppers who have spoken to our advisors.

• Facial recognition. Something that often drives managers to invest in new construction payroll tools are alternative methods to enter time. As Eschenburg explains, “Platforms offering biometrics capabilities don’t always work for people working in the field all day long whose fingerprints might not be readable, or who might be wearing gloves.” This makes options like facial recognition more appealing for construction workers.

• Geofencing. Another commonly requested feature, according to Burlison, is geofencing, or the use of GPS or RFID technology to create a virtual geographic boundary, enabling your software to trigger a response when a mobile device enters or leaves a particular area. 

“We’ll have buyers who are unsure whether a worker showed up to the job site, or if they’re clocking in before they’ve arrived,” explains Burlison. “So they need some sort of geofencing capability.”

Keep in mind that these types of functionalities will only come in payroll systems that include time and attendance features, otherwise you may need to seek out a standalone time tracking tool.

For more information on construction payroll-specific features and recommendations, feel free to schedule an appointment with Burlison and Eschenburg, or one of their colleagues.

How to choose the right construction payroll software

When you start the process of checking out potential construction payroll solutions, you should detail all your requirements and categorize them based on their importance. Nice-to-have features, such as 1099 preparation, can come at the very end. Therefore, the solutions you’re considering should address all your crucial needs first.

Step 1: Define your requirements

Before you start the construction payroll software selection process, begin outlining the requirements that are unique to your business. Not only will these guide you to the platform that meets your current demands—you will end up with software that supports your long-term goals as well.

You’ll also want to determine your ideal deployment model. The two common types of construction payroll software are cloud-based and on-premise, although our advisors have stated that it’s become rare for buyers to ask for on-premise systems. As we mentioned earlier, general contractors and house builders need cloud-based payroll software to manage on-site employees.

Step 2: Make a shortlist of construction payroll software

With so many payroll software options to choose from, it can be a challenge to narrow down the options that are right for your business—but with the right resources and support, it doesn’t have to be.

Get qualified help from an advisor

At Software Advice, our advisors like Burlison and Eschenburg have experience helping hundreds of business owners identify solutions that match their needs and budgets.

If you need guidance, you can chat online now with an advisor or schedule a phone call. In just a few minutes, your advisor will help you identify a shortlist of options that align with your business’s requirements.

Explore our list of payroll FrontRunners

If you’re not ready to speak to an advisor just yet, you can also start compiling your shortlist of payroll software with our FrontRunners report. Only products that earn top user ratings make this list. To be eligible for consideration, a product must:

• Have at least 20 unique user reviews in the last 24 months

• Be a stand-alone payroll software product

• Offer these features: payroll management, payroll reporting, and tax compliance.

Check out our full methodology description for more detail on how the report is compiled.

Step 3: Pick the best construction payroll software for your business

Now that you’ve compiled a list of top choices, you should start scheduling vendor demos. Vendor demos help you explore features, understand pricing, and ultimately make the right investment. Preparation is key to getting the most out of these sessions, so here's a list of questions you should ask the vendor:

• Is the software scalable?

Check whether the construction payroll software you're considering will adapt and scale up as your business grows. The software should automatically add new employees to the distribution list when they're onboarded. Make sure you ask the vendor whether you'll be charged extra for adding new employees.

• Does the software support integration?

Ask vendors whether their solution supports integrations with your existing applications such as HR and accounting systems. Be specific about all the stakeholders who'll use the software and the effort, time and costs associated with integrations.

• Does the vendor offer customer support?

Find out whether the vendor offers support 24/7, only during business hours or not at all. Also, ask for the available support options such as email, phone or live chat. Make sure to ask the vendor about their usual response time, so that you're able to get your employees' salary issues and queries resolved on time.

Understanding payroll market trend

Cloud technology has influenced the way businesses, including those in construction, execute payroll operations. Today, businesses are transitioning to cloud-based tools to help HR managers track payroll in real time and auto-generate payroll data cost. Here are some trends in this industry to look out for.

• Widespread adoption of hyperautomation: Among the top emerging technology trends in HR, hyperautomation is influencing how activities such as payroll are being processed and enhancing efficiency and reliability across manual workflows. However, the limited expertise of the HR team is among the main barriers that stand in the way of the full potential of this technology. [3]

Note: The screenshots of applications included in this article are examples to show a feature in context and are not intended as endorsements or recommendations. 

Note: Questions and responses have been edited for brevity and clarity.

About our contributors

Author

Lauren Spiller is a senior content writer at Software Advice, covering sales and CRM with a focus on retail and customer experience. After receiving an MA in rhetoric and composition from Texas State University, Lauren has pursued a career that allows her to help others through writing.

Lauren’s research and writing for Software Advice is informed by nearly 300,000 authentic user reviews and more than 15,000 interactions between Software Advice software advisors and CRM or sales software buyers. Lauren also regularly speaks to leaders in the sales and CRM space so she can provide the most up-to-date and helpful information to small and midsize businesses purchasing software or services.

Lauren previously taught college writing and served as writing center assistant director at Texas State University. She has presented at the European Writing Centers Association, Canadian Writing Centres Association, and the International Writing Centers Association conferences. She currently lives in Wimberley, Texas, with her husband and their three cat sons.

Editor

Lindsay Page is an editor at Software Advice. She specializes in editing data-driven research and tech trends reports for small to midsize businesses. She has more than a decade of experience writing and editing for a variety of industries, with particular expertise in cybersecurity, corporate and securities regulation, and finance. 

When not editing, Lindsay can be found reading a mystery novel, spending time with her family, and playing competitive tennis. Lots and lots of tennis.

Advisors

Ryan Eschenburg is a senior advisor. He joined Software Advice in 2014, and he is based in Austin, TX.

Ryan works directly with small-business leaders to connect them with best fit software providers. He assesses the technology needs of small businesses seeking HR and learning management software through one-to-one conversations and provides a short list of potential matches. 

His favorite part of being a software advisor is helping buyers ease their stress and save time during their software search.

Steve Burlison is a senior advisor. He joined Software Advice in 2017 as a software advisor and is based in Austin, TX.

As part of the software advisor team, Steve helps HR and learning management industry professionals who are seeking tools such as recruiting, training, and talent management software. He provides a short list of personalized technology recommendations based on budget, business goals, and other specific needs. 

Steve’s favorite part of being a software advisor is partnering with overwhelmed buyers to navigate the confusing software landscape; he enjoys discovering the specific tool a buyer needs and explaining how it will help them.

Sources

1. Software Advice software pricing data: Only products with publicly available pricing information and qualified software products within the category, as of Mar. 8, 2025, are included in the pricing analysis.

2. Software Advice advisor call notes: Findings are based on data from telephonic conversations that Software Advice’s advisor team had with small-to-midsize businesses seeking construction payroll tools. For this report, we analyzed phone interactions from July 31, 2023, to July 31, 2024. 

3. 8 Learnings from Gartner’s Hype Cycle for HR Transformation, Gartner