A vital part of running a small construction business is managing the payroll of your employees in accordance to state and federal regulations.
However, small businesses face various payroll and tax calculation issues such as delays in releasing paychecks, inaccurate payments due to manual data entry, as well as lack of or poor communication among employee, supervisor, and timekeeper regarding standards and deadlines.
To avoid all of these challenges, small businesses need construction payroll software to automate the process of paycheck calculation, wage reporting and compliance management. It will help them avoid costly fines that result from manual errors.
Finding the right construction payroll software can be tough if you're doing it all on your own. That's why, we created this guide to help potential buyers understand the software, its features and the overall market.
In this guide, we'll cover:
What Is Construction Payroll Software?
Common Features of Construction Payroll Software
What Type of Buyer Are You?
Market Trends to Understand
Construction payroll software helps small business 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.
The software can also integrate with various leave management and time tracking functionality/tools to accurately calculate employee wages, bonuses and overtime.
FOUNDATION's payroll dashboard
This section looks at some of the common features of construction payroll software that most small businesses require for their processes.
| Compensation management | Calculate labor wages based on attendance, employment terms and policies over a period of time—monthly, weekly or bi-weekly. |
| Time-off tracking | Track time and attendance data for all employee types (hourly, salaried, remote or on-site) to calculate gross pay. |
| Direct deposit | Deposit labor wages directly into employees' bank accounts for each pay period. |
| Compliance management | Get real-time updates to comply with labor regulations such as Fair Labor Standards Act (FLSA) and Immigration and Nationality Act (INA). |
| Tax filing | Calculate state and federal payroll taxes; also, manage tax filings and wage report forms such as DOL-4N and 1099-MISC. |
| Reporting and analytics | Generate reports to get an overview of the gross-to-net payroll register, taxes, compensation analysis and other payroll data. |
| Self-service portal | Allow employees to view their payroll data (pay stubs and tax deductions); let them manage their account information such as bank details and contact information. |
| Multi-location payroll processing | Ensure accurate pay calculations for different states and regions so that remote workers are paid as per local labor standards and tax laws. |
As you begin shortlisting the construction payroll software, you need to understand the type of buyer you are to narrow down your requirements. The next section breaks down the two most common 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.
The advent of cloud technology has influenced the way businesses execute payroll operations. Today, businesses are transitioning to cloud-based tools that help HR managers track payroll in real time and auto-generate payroll data cost. Here are some trends in this industry that you should keep an eye on in 2019.
Predictive analytics to improve payroll. Predictive analytics let businesses analyze payroll data and find profit trends based on the region. This helps them reassess labor deployment. The data can also help them understand the age of their labor, so that they start searching for replacements of those nearing the retirement age.
Our service is simple and 100% free to customers like you because software vendors pay us when we connect them with quality leads. You save time and get great advice. Vendors get great referrals. It's a win for everyone!
