Free Payroll Tool
See what your payroll provider really charges
Most providers hide per-run and add-on fees. Audit your real cost per employee in about 30 seconds, free.
Run the Payroll Fee Auditor →Blog · Payroll Management · Construction
Construction Companies: Integrating Benefits with Payroll (2026)
Benefits integration for construction companies means every benefit deduction and every employer contribution flows through payroll with the right pre-tax or post-tax treatment, the ACA count runs from payroll hours, and the construction company items cited here, IRS Notice 2025-54 and DOL Fact Sheet #66. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Benefit rules that reach construction companies
For per diem allowances paid for travel away from home on or after October 1, 2025, the IRS high-low substantiation rates are $319 per day for high-cost localities and $225 for all other localities in the continental United States, of which $86 and $74 are treated as paid for meals. The incidental-expenses-only rate is $5 per day.
On Davis-Bacon covered work the prevailing wage is the basic hourly rate plus the fringe benefit amount listed in the wage determination. The contractor may satisfy it by paying the whole amount as cash wages or by a combination of cash wages and bona fide fringe benefits, and it must be paid for all hours worked on the site of the work.
What integration actually does
Section 125 pre-tax premiums come off before FICA and income tax; 401(k) deferrals come off before income tax only; Roth and most voluntary deductions are post-tax. Employer contributions are recorded per employee for the 401(k) census and Form 5500. Payroll hours feed the ACA full-time and full-time-equivalent count, and at 50 or more the offer of coverage is documented on Form 1095-C from that same data. For construction companies with prevailing wage compliance, the benefit base has to be defined per plan document, because the plan decides whether that pay counts as compensation.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- For per diem allowances paid for travel away from home on or after October 1, 2025, the IRS high-low substantiation rates are $319 per day for high-cost localities and $225 for all other localities in the continental United States, of which $86 and $74 are treated as paid for meals. The incidental-expenses-only rate is $5 per day. [IRS Notice 2025-54]
- On Davis-Bacon covered work the prevailing wage is the basic hourly rate plus the fringe benefit amount listed in the wage determination. The contractor may satisfy it by paying the whole amount as cash wages or by a combination of cash wages and bona fide fringe benefits, and it must be paid for all hours worked on the site of the work. [DOL Fact Sheet #66]
Read the full guide to benefits deductions in managed payroll, and the rest of the construction company payroll library.
Managed Payroll, Handled.
BEG manages payroll at $45 per employee per month, all-inclusive. Get an instant cost comparison for your business.
Frequently Asked Questions
Benefits and construction company payroll: IRS Notice 2025-54
For per diem allowances paid for travel away from home on or after October 1, 2025, the IRS high-low substantiation rates are $319 per day for high-cost localities and $225 for all other localities in the continental United States, of which $86 and $74 are treated as paid for meals. The incidental-expenses-only rate is $5 per day.
Benefits and construction company payroll: DOL Fact Sheet #66
On Davis-Bacon covered work the prevailing wage is the basic hourly rate plus the fringe benefit amount listed in the wage determination. The contractor may satisfy it by paying the whole amount as cash wages or by a combination of cash wages and bona fide fringe benefits, and it must be paid for all hours worked on the site of the work.
Does prevailing wage compliance count as compensation for a 401(k) match?
Only if the plan document says so. Plan compensation definitions vary, and payroll has to apply the definition the plan uses, not the one that seems natural. A mismatch is one of the most common plan failures found on audit.
What does managed payroll cost for a construction company?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Prevailing wage compliance, certified payroll and union vs non-union are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Construction Companies. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: IRS: Affordable Care Act for Employers
From the blog