What is certified payroll? How to do reporting and forms to file

Navigating certified payroll can feel like traversing a construction site with many hidden pitfalls. The payroll forms, reports, and filing processes can be time-consuming for contractors and subcontractors. 

You may need to submit weekly payroll reports if your business works on federally funded projects. It’s one more thing you need to take care of as a business owner. 

Here’s a breakdown of what you need to know about certified payroll, including payroll reports and how to file.

Jump to:

• How certified payroll works
• Certified payroll requirements
• How to fill out Form WH-347 step by step
• Certified payroll reporting
• Best practices for managing certified payroll reports
• Next steps for streamlining your payroll process

How certified payroll works

Certified payroll is a federal payroll report that government contractors must submit weekly using Form WH-347. 

The form lists every employee, their wages, their benefits, the type of work they did, and the hours worked. It also shows withholdings and gross wages. You must file the report with the US Department of Labor each week, even if the work temporarily halts. 

Certified payroll reports confirm you are paying employees a prevailing wage as part of the Davis-Bacon and Related Acts.

What is the Davis-Bacon Act?

Certified payroll is a requirement of the Davis-Bacon and Related Acts, which ensures workers on public works projects get fair compensation. These laws apply to the construction or repair of public buildings or public works projects. The term “public works” refers to structures built for public use, such as schools and highways.

If your business works on a federal contract of over $2,000, the Davis-Bacon Act requires that you complete certified payroll reports. 

What are prevailing wage laws?

To ensure business owners who work on federal construction projects compensate workers fairly, they must pay their workers a specific pay rate. Their gross pay must be no less than the local prevailing wage rates for corresponding work on similar projects in the area. 

State prevailing wage rates

You must also comply with state prevailing wage rates. If the state rate is higher than the federal rate, you must pay the state’s higher rate. Your state can verify whether you must comply with a state wage requirement.

Where to find wage determination?

The Department of Labor can help you find your wage determination. It lists the wage rates and fringe benefit rates for each labor category. Use the filters on the site to find the wage rates for a particular project. 

What roles does it cover? 

Prevailing wage laws cover a wide range of roles typically found on construction sites, including electricians, carpenters, plumbers, welders, and equipment operators. 

Who do these laws apply to?

However, these laws generally apply only to on-site workers performing manual labor. Executive, administrative, or professional staff—especially those in salaried roles—are usually exempt from certified payroll requirements.

Certified payroll requirements

To stay compliant with the Davis-Bacon Act, contractors and subcontractors must meet specific certified payroll requirements. These include documentation, wage compliance, and reporting accuracy.

Here are the core certified payroll requirements:

• Submit weekly payroll reports using Form WH-347
• Pay workers at or above the local prevailing wage
• Include detailed wage, hours, and classification data
• Certify that your records are accurate and complete
• Keep payroll records for at least three years

Failure to meet these requirements could result in back wage liability, contract termination, or legal penalties.

Now let’s look at how to fill out Form WH-347 in more detail.

Form WH-347 information section

Then move on to the numbered columns on the form:

Form WH-347 column section

Now review the certified payroll example below to see what Form WH-347 looks like filled out:

After completing the first page of Form WH-347, don’t forget the second page. The second page is where you “certify” your report. 

It includes a statement of compliance that indicates the payroll forms are correct and complete. It asserts the pay for each employee meets the proper prevailing wage.

How to fill out Form WH-347 step by step

Form WH-347 is the federal form used for certified payroll reporting. It lists key details about your workers’ wages, classifications, hours worked, and more. Here’s how to fill it out:

Step 1: Enter general project and employer details

At the top of the form, include:

• Your firm’s name and address
• Whether you’re a contractor or subcontractor
• The payroll number (starting at “1” and increasing weekly)
• The week ending date for that payroll period
• The project name and location
• The project or contract number (from your government contract)

Step 2: Complete the worker information table

For each employee who worked that week:

1. Name and SSN: Enter the worker’s full name and the last four digits of their Social Security number.
2. Withholding exemptions (optional): Include their number of exemptions if you track them.
3. Job classification: List the worker’s role (e.g., electrician, carpenter, laborer).
4. Work hours: Fill in the number of regular and overtime hours for each day.
5. Total hours: Add the total hours worked that week.
6. Pay rate: List the hourly rate, including fringe benefits.
7. Gross pay: Multiply hours by rate to get total earnings.
8. Deductions: Itemize taxes and other deductions.
9. Net wages: Subtract deductions from gross pay.

Step 3: Certify your report

The second page of the form includes a Statement of Compliance. This is where you affirm that:

• The information provided is accurate and complete
• Each employee received at least the prevailing wage
• The report complies with the Davis-Bacon Act

This certification must be signed by a company officer or payroll manager.

Certified payroll reporting

Some contractors and payroll providers think they must be a Certified Payroll Professional (CPP) to complete and submit a certified payroll report. That’s not true. Any contractor provider can complete and submit a certified payroll report.

That said, some businesses choose to hire a certified payroll specialist to help them stay compliant. A certified payroll specialist is someone who has passed the Certified Payroll Professional (CPP) exam and earned accreditation from the American Payroll Association (APA). 

This certification confirms they have the training and experience to handle complex payroll processes, especially those involving prevailing wage and public works requirements.

A company owner or payroll manager signs the statement of compliance. In doing so, they understand that the willful falsification of any payroll information may subject the contractor or subcontractor to civil or criminal prosecution.

Who creates certified payroll reports?

Anyone can complete a certified payroll report. The biggest job is gathering the data and completing the form.

It should take less than an hour to gather and compile the information for eight employees on a single report. But you could spend hours just collecting, reviewing, and confirming your payroll data. That’s in addition to generating paychecks and completing a certified payroll report. 

This work becomes more time-consuming; the more employees you have, the more jobs you work on. It’s also highly error-prone if you are creating these payroll reports manually.

Best practices for managing certified payroll reports

Better organization makes it easier to fill out and submit your certified payroll reports. Here are a few tips to stay on top of this important task:

• Create a procedures manual: This will help you document the payroll process, where a manual can help you train new team members, work efficiently, and reduce errors.
• Embrace technology: If you’re managing payroll on spreadsheets, you might be using an outdated process. Entering data manually can result in errors, and you risk losing important data. 
• Keep records: The Fair Labor Standards Act (FLSA) requires that you keep payroll records for at least three years. So make sure you’re storing them in an organized way. You’ll be glad you did if you ever need to refer back to them.
• Avoid key mistakes: Some contractors and payroll providers believe one payroll form or format will meet certified payroll requirements in all 50 states. However, some states have multiple forms and electronic filing requirements.

Failing to pay the prevailing wage can be costly, as you may have to pay back wages to employees. Plus, not meeting the requirements of the Davis-Bacon Act can lead to contract termination. 

Next steps for streamlining your payroll process

Managing payroll is a necessary part of construction accounting for contractors. However, creating and submitting a certified payroll report is an added step for those who work on construction projects. 

Automated payroll services and software like QuickBooks Payroll can help you run payroll faster and more accurately. You can also use built-in payroll tools to create a certified payroll report.