How to do certified payroll step by step
On a Davis-Bacon job, certified payroll means paying each worker at least the wage determination rate plus fringe for their classification, then submitting a weekly payroll report with a signed Statement of Compliance for every week covered work is performed.
To do certified payroll, you pull the wage determination in your contract, assign every worker on site a classification from it, record their hours by day and by classification, pay at least the listed hourly rate plus fringe benefits, and then submit a weekly payroll report with a signed Statement of Compliance. Under the federal rules at 29 CFR 5.5, contractors and subcontractors must submit certified payrolls weekly for each week in which covered work is performed, and the prime contractor is responsible for getting them in from every sub. The rest of this guide walks through each step with an example.
The Davis-Bacon Act and its related acts apply to federally funded or assisted construction contracts in excess of $2,000, according to the U.S. Department of Labor. Many states run their own prevailing wage programs for state and local public works, with different forms and deadlines, so confirm which rules apply to each job before the first payroll.
What you need before the first payroll
- The contract's wage determination, including its number and modification. This is the rate sheet you must follow.
- A worker list with classifications that match the wage determination exactly, such as Electrician or Laborer: Common.
- Fringe benefit plan details, including the hourly cost of each plan per worker, if you take credit for benefits.
- Apprenticeship registration for anyone paid at an apprentice rate.
- Daily time records by project and classification. A construction timesheet template works if it splits hours by job and trade.
Certified payroll in 8 steps
1. Confirm the wage determination
Use the wage determination incorporated in your contract, not whichever one is newest on SAM.gov. The contracting agency selects it, and it generally applies for the life of the contract. See how to find the right Davis-Bacon wage determination for how to read it.
2. Post the wage determination on site
29 CFR 5.5 requires the contractor and its subcontractors to post the wage determination and the Davis-Bacon poster (WH-1321) at the site of the work at all times. Put them where workers can actually see them.
3. Classify every worker by the work they do
Classification follows the work performed, not the worker's job title in your company. If someone does work in two classifications in the same week, you can pay each rate only if your records show the time in each. See dual classification. If the work does not fit any listed classification, ask the contracting officer to start a conformance request.
4. Track hours daily, by classification
Record hours each day, split by straight time and overtime. The Contract Work Hours and Safety Standards Act requires time and a half for hours over 40 in a workweek on prime contracts over $100,000, per DOL. Count all hours in the week, on all jobs, when deciding overtime.
5. Calculate pay: base rate plus fringe
Each worker must receive at least the basic hourly rate plus the fringe amount for their classification. You can pay the fringe in cash, into bona fide benefit plans, or in a mix. DOL Fact Sheet 66E gives an example: with a $27.00 base rate and $14.00 fringe, a contractor can pay $41.00 in cash, $27.00 plus $14.00 in benefits, or $35.00 plus $6.00 in benefits. Plan contributions must be annualized; see fringe benefit credits.
6. Fill out the weekly payroll report
DOL's optional WH-347 is the standard format, but any report with the same information works. Use only the last four digits of Social Security numbers on the submitted report. Step-by-step column instructions are in how to fill out the WH-347 form.
7. Sign the Statement of Compliance
Each payroll must be accompanied by a Statement of Compliance signed by the contractor or subcontractor. DOL's WH-347 instructions say it does not need to be notarized, that legally valid electronic signatures are accepted, and that photocopied or scanned signatures do not satisfy the requirement. A false certification can lead to civil or criminal prosecution under the federal statutes cited in 29 CFR 5.5.
8. Submit weekly and keep records
Send the report to the contracting agency, or to the applicant, sponsor, or owner when the agency is not a party to the contract. Submit a report for every week covered work happens. Keep payroll records for at least 3 years after all work on the prime contract is complete, as 29 CFR 5.5 requires.
Worked example: one electrician, one week
Say a wage determination lists Electrician at $38.50 base plus $16.20 fringe (illustrative numbers; use your contract's rates). The electrician works 44 hours on a covered prime contract over $100,000, and the contractor pays the fringe entirely in cash.
| Line | Calculation | Amount |
|---|---|---|
| Straight time | 40 hrs x ($38.50 + $16.20) | $2,188.00 |
| Overtime | 4 hrs x (1.5 x $38.50 + $16.20) | $295.80 |
| Gross for the week | $2,483.80 |
Notice the overtime premium applies to the base rate only. DOL Fact Sheet 66E says cash paid in lieu of fringe does not require an extra half-time premium. If the contractor paid the worker $45.00 an hour on every job, including private work, the extra would count as regular pay and would be included in the overtime rate.
Federal vs state certified payroll
Everything above follows the federal Davis-Bacon rules. A state-funded school or city water project may fall under a state prevailing wage law instead, or in addition when federal money is mixed in. States often use their own rate schedules, their own forms or online reporting portals, and their own deadlines, and some require payroll records to be filed monthly or on request rather than weekly. When a job has both federal and state requirements, plan to meet both sets of rules, and compare both rate schedules for every classification before you set pay rates. Look up the state rules on the prevailing wage by state pages and confirm with the awarding agency at the preconstruction meeting.
Common certified payroll mistakes
- Wrong classification. Paying a worker doing electrical work as a laborer is one of the most common findings.
- Skipping weeks. A report is due for every week covered work is performed, by you and by each sub.
- Claiming fringe credit without annualizing, or taking credit for items like company trucks, phones, or required holidays.
- Unregistered apprentices at apprentice rates. Anyone not properly registered must be paid the full journeyworker rate. See apprentice rules.
- Late sub payrolls. The prime is responsible for collecting them. See how to collect certified payroll from subcontractors.
- Full Social Security numbers on submitted reports.
Templates and tools for certified payroll
Start with the certified payroll template. Read what happens in a Davis-Bacon audit so you know what your records need to prove, and how to price prevailing wage jobs so the bid covers the real cost.
Smart Business Automator prepares weekly certified payroll reports from job time records, keeps classifications and rates per job, and tracks which subcontractor payrolls are in or missing. See certified payroll automation.
Frequently asked questions
How often is certified payroll due?
Under 29 CFR 5.5, weekly, for each week in which covered work is performed. State prevailing wage programs set their own schedules, so check the state rules for state and local jobs.
Do I have to use form WH-347?
No. DOL says use of the WH-347 is optional, but contractors must still submit the same weekly payroll information and a signed Statement of Compliance.
How long do I keep certified payroll records?
29 CFR 5.5 requires payroll records to be kept for at least 3 years after all the work on the prime contract is complete. State programs and your own document retention policy may require longer.
Who signs certified payroll?
The contractor or subcontractor, or an agent who pays or supervises the payment of the workers. The signer should know the facts certified are true.
What if no work was done on the project in a week?
The federal rule ties the weekly submission to weeks in which covered work is performed. Many agencies still ask for a no-work report to keep the sequence unbroken, so follow the contract and the agency's instructions.
