Processing payroll in the construction industry is uniquely complex. Between time tracking from the field, union rules, prevailing wage requirements, and multi-jurisdiction compliance, contractors often struggle with manual processes that drain time and increase the risk of costly errors. Without the right tools, payroll delays and inaccuracies can ripple through job costing, compliance reporting, and ultimately, impact profitability.
That’s where construction payroll software comes in. Penta’s comprehensive ERP features a fully integrated payroll solution purpose-built for contractors that simplifies processing with automation, integration, and real-time visibility. Below, we’ll explore the top five payroll challenges contractors face and how Penta’s ERP solves them.
1. Time Tracking Accuracy & Manual Entry
The challenge: Collecting accurate and timely timecards from the field is one of the biggest payroll hurdles that contractors face. Manual processes and duplicate entry not only increase payroll overhead but also lead to frequent errors.
The solution: Penta’s ERP offers multiple time tracking options, including TEP, eTime, and MFS, to streamline time collection, reduce manual errors, and eliminate double-entry. By capturing data directly from the field, payroll can be processed faster, with costs distributed to projects daily (or even more frequently). Efficient and accurate time capture from the field is essential to ensuring a smooth construction payroll process.
2. Job Cost Delays
The challenge: In many systems, payroll and job costing are disconnected. Contractors often have to wait until payroll is processed before they can see updated job productivity or actual vs. forecast results, delaying critical decisions.
The solution: Penta is a comprehensive construction ERP. As payroll calculations are run, job costs and the general ledger update in real time. This gives contractors daily visibility into job performance, enabling faster course corrections to maximize profitability. With these insights, project managers can pivot quickly, protecting margins and improving overall project delivery.
3. Multi-State Payroll Reporting & Compliance
The challenge: Construction companies frequently operate across multiple states, cities, and local taxing authorities. Tracking reciprocity rules and making manual tax adjustments creates a compliance nightmare.
The solution: Penta’s payroll engine automatically calculates and withholds state and local taxes based on predefined reciprocity rules. This eliminates manual overrides, reduces wage adjustments, and simplifies year-end W2 processing. Contractors can stay compliant with less effort and fewer errors, freeing payroll teams to focus on higher-value tasks.
4. Prevailing Wage Compliance
The challenge: Meeting prevailing wage requirements is complex, especially when factoring in benefits, fringes, and employer contributions. Many payroll systems only compare hourly wages, leaving gaps in compliance.
The solution: Penta’s construction payroll software automates prevailing wage calculations for both union and non-union employers, evaluating the total compensation package, not just wages.
- Union contractors can define local rates and benefits by job. Penta’s payroll engine automatically compares the employee’s total compensation package, including wages, fringes, matches, and employer-paid taxes, against the prevailing wage package to ensure compliance.
- Non-union contractors can define local rates and benefits that include PTO accruals, retirement matches, and other contributions to determine the total employee compensation package. Penta then ensures each employee’s full package meets or exceeds prevailing wage requirements.
5. Monthly, Quarterly & Year-End Compliance Reporting
The challenge: Construction payroll reporting is notoriously complicated. Union agreements, multi-state operations, and complex labor laws make timely reporting difficult and missed deadlines can lead to costly penalties.
The solution: Penta’s construction ERP software provides all required compliance reports and electronic filings to simplify monthly, quarterly, and annual reporting. Whether you’re preparing for an audit or meeting deadlines across multiple jurisdictions, contractors can count on accurate, on-time reporting. Penta ensures deadlines are met, penalties are avoided, and audit preparation is stress-free.
Simplify Construction Payroll with Penta
Payroll in construction doesn’t have to be a headache. With Penta’s integrated payroll tools, contractors can eliminate manual workarounds, stay compliant, and gain real-time job cost insights that drive profitability. In addition to improving the payroll process, project managers gain more timely visibility, finance teams get more accurate data, and executives gain confidence in forecasts and profitability.
By combining payroll, job cost, compliance, and reporting into one unified system, Penta helps companies transform their construction payroll processing from a time-consuming burden into a strategic advantage.
Ready to see how Penta can transform your payroll process? Talk to an expert today!
