Certified Payroll Made Simple: Contractor’s Guide for 2025
If you are a contractor or subcontractor working on a federally funded construction project, you have likely heard of certified payroll. For many contractors, this requirement may seem complicated and confusing, but it is one of the most crucial aspects of Davis-Bacon Act compliance.
At Davis Bacon Solutions, we act as your “Davis-Bacon Guide for Dummies.” Our goal is to make certified payroll reporting straightforward so you can stay compliant, avoid mistakes, and focus on your projects.
And if your project requires a third-party labor compliance officer, our extension Labor Compliance CA, LLC is here to help. Together, we make sure certified payroll compliance is straightforward and stress-free.
What is Certified Payroll?
Certified payroll is the weekly wage report that contractors and subcontractors must submit when working on federally funded or federally assisted projects covered by the Davis-Bacon Act (DBA).
This requirement ensures that workers are being paid the correct prevailing wage and fringe benefits for their job classification.
The standard form is WH-347, created by the U.S. Department of Labor.
It lists every employee, their work classification, hours, gross pay, deductions, and net wages.
Each payroll must be signed with a statement of compliance.
The certified payroll requirement demonstrates to the government that contractors are paying workers fairly and adhering to wage laws.
Why Certified Payroll Matters
Certified payroll reporting protects both workers and contractors.
Workers are guaranteed fair wages and benefits.
Contractors can avoid fines, penalties, and withheld payments by staying compliant.
Agencies can confirm quickly that contractors are following the law.
In short, without certified payroll, contractors risk not getting paid on time.
Certified Payroll Requirements in 2025
The Department of Labor has made certified payroll a high priority in 2025. Here are the main things you need to know:
Weekly Reporting
Certified payroll must be submitted every week the project is active.
Even if no work was done, a “no work” statement must still be submitted.
Digital Submissions
Many agencies now require payroll to be submitted electronically.
Paper copies are being phased out in favor of digital records.
Stronger Audits
Random audits are more common in 2025.
Agencies will check for worker misclassification, incorrect wages, and missing fringe benefits.
Prime Contractor Responsibility
Prime contractors are responsible for ensuring that subcontractors submit accurate payroll.
If a subcontractor is non-compliant, the prime contractor can be penalized.
Step-by-Step Guide to Certified Payroll
Step 1: Collect Worker Details
Gather each employee’s full name, address, Social Security number, job classification, and hours worked.
Step 2: Apply the Correct Prevailing Wage
Use the correct wage determination for the project, which can be found on SAM.gov. Always confirm the classification matches the actual work being performed.
Step 3: Calculate Fringe Benefits
Contractors must provide benefits such as healthcare, retirement, or training programs, or pay the equivalent cash amount. Keep documentation of every benefit contribution.
Step 4: Complete Form WH-347
Enter gross wages, deductions, and net pay for each worker. Double-check for accuracy before signing the statement of compliance.
Struggling with Form WH-347? We broke it down step by step so you can fill it out without the headache. Read our complete guide here: How to Fill Out Form WH-347 (Without Getting Confused)
Step 5: Submit Weekly
Turn in your certified payroll report every week. Most agencies now prefer electronic submissions for speed and accuracy.
Common Mistakes Contractors Make
Many payroll errors occur due to minor oversights. The most common mistakes include:
Misclassifying workers (for example, paying a skilled electrician as a general laborer).
Not paying the correct fringe benefit amounts.
Missing weekly submission deadlines.
Incomplete records, such as missing deductions or overtime hours.
Failing to review subcontractor payroll reports.
Fixing these mistakes after the fact can be costly. It is much easier to prevent them from the start.
Want to avoid the most common payroll reporting errors? Check out our guide: Top Mistakes to Avoid in Certified Payroll Reports.
Tips to Make Certified Payroll Easier
Use payroll software that automatically generates WH-347 forms.
Train payroll staff on Davis-Bacon wage classifications.
Keep a digital archive of pay stubs, timecards, and benefit records.
Audit subcontractors’ payrolls before submission.
Stay updated on wage determinations throughout the project.
If your team lacks the time or resources to manage all of this, consider hiring experts to assist with the task. That is where Labor Compliance CA, LLC can step in as your compliance officer to handle certified payroll on your behalf.
Why Work with Davis Bacon Solutions?
At Davis Bacon Solutions, we understand that most contractors want clear answers without complicated legal language. That is why we:
Publish weekly guides that explain Davis-Bacon compliance in plain language.
Provide step-by-step help with certified payroll and wage requirements.
Connect contractors with full-service compliance support through our partner Labor Compliance CA, LLC.
Our goal is to help you run successful public works projects without worrying about wage compliance.
Certified payroll may seem complicated, but once you understand the process, it is manageable. The key is to collect accurate information, apply the correct wage rates, and submit reports on a weekly basis.
By taking certified payroll seriously, you protect your business, your workers, and your eligibility for future federal projects.
If you need additional help, consider reaching out to Davis Bacon Solutions for free resources or working with Labor Compliance CA, LLC for hands-on payroll compliance support.