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 · Engineering
Engineering & Professional Services Firms: Payroll Compliance Guide (2026)
Payroll compliance for engineering firms rests on the federal rules that reach this industry specifically, 4 of which are cited on this page, plus the deposit and filing duties every employer carries. BEG runs engineering firm payroll for $45 per employee per month inside the payroll software you already use, all-inclusive, live in 3 to 5 business days.
The rules that reach engineering firms specifically
Engineering is listed as a field of science or learning for the learned professional exemption, so engineers whose primary duty requires advanced knowledge acquired through prolonged specialized instruction and who are paid on a salary or fee basis at the standard salary level are exempt from overtime. Job titles alone do not determine exemption status.
The standard salary level for the executive, administrative and professional exemptions is $684 per week, equivalent to $35,568 per year; the highly compensated employee threshold is $107,432 per year including at least $684 per week paid on a salary or fee basis.
The Davis-Bacon Act applies to federal and District of Columbia contracts over $2,000 for construction, alteration or repair of public buildings or works, and Related Acts extend it to most federally assisted construction. Contractors must pay laborers and mechanics the prevailing wage including fringe benefits, pay weekly, and submit weekly certified payroll records to the contracting agency.
The Service Contract Act covers federal service contracts over $2,500 and requires prevailing wage rates and fringe benefits for service employees; workers who meet the executive, administrative or professional exemption under 29 CFR part 541 are not service employees under the Act. Contracts of $2,500 or less carry the $7.25 federal minimum wage.
The duties every employer carries
Federal income tax withholding, Social Security and Medicare, FUTA, deposits on the monthly or semiweekly schedule the lookback period sets, quarterly Form 941, annual W-2s and, for engineering firms paying contractors, 1099-NEC at the $2,000 threshold in force for tax years after 2025. A late deposit starts at a 2 percent failure-to-deposit penalty and climbs to 15 percent.
For every week in which Davis-Bacon covered work is performed, the contractor or subcontractor must submit a certified payroll with a signed Statement of Compliance to the contracting agency; the prime contractor is responsible for all subcontractor submissions, and certified payrolls and basic payroll records must be preserved for 3 years after all work on the prime contract is completed.
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.
- Engineering is listed as a field of science or learning for the learned professional exemption, so engineers whose primary duty requires advanced knowledge acquired through prolonged specialized instruction and who are paid on a salary or fee basis at the standard salary level are exempt from overtime. Job titles alone do not determine exemption status. [DOL Fact Sheet #17D]
- The standard salary level for the executive, administrative and professional exemptions is $684 per week, equivalent to $35,568 per year; the highly compensated employee threshold is $107,432 per year including at least $684 per week paid on a salary or fee basis. [DOL WHD Earnings thresholds for the EAP exemption]
- The Davis-Bacon Act applies to federal and District of Columbia contracts over $2,000 for construction, alteration or repair of public buildings or works, and Related Acts extend it to most federally assisted construction. Contractors must pay laborers and mechanics the prevailing wage including fringe benefits, pay weekly, and submit weekly certified payroll records to the contracting agency. [DOL Fact Sheet #66]
- The Service Contract Act covers federal service contracts over $2,500 and requires prevailing wage rates and fringe benefits for service employees; workers who meet the executive, administrative or professional exemption under 29 CFR part 541 are not service employees under the Act. Contracts of $2,500 or less carry the $7.25 federal minimum wage. [DOL Fact Sheet #67]
- For every week in which Davis-Bacon covered work is performed, the contractor or subcontractor must submit a certified payroll with a signed Statement of Compliance to the contracting agency; the prime contractor is responsible for all subcontractor submissions, and certified payrolls and basic payroll records must be preserved for 3 years after all work on the prime contract is completed. [29 CFR 5.5(a)(3)]
Read the full guide to the payroll compliance library, and the rest of the engineering firm 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
Engineering firm compliance: DOL Fact Sheet #17D
Engineering is listed as a field of science or learning for the learned professional exemption, so engineers whose primary duty requires advanced knowledge acquired through prolonged specialized instruction and who are paid on a salary or fee basis at the standard salary level are exempt from overtime. Job titles alone do not determine exemption status.
Engineering firm compliance: DOL WHD Earnings thresholds for the EAP exemption
The standard salary level for the executive, administrative and professional exemptions is $684 per week, equivalent to $35,568 per year; the highly compensated employee threshold is $107,432 per year including at least $684 per week paid on a salary or fee basis.
Engineering firm compliance: DOL Fact Sheet #66
The Davis-Bacon Act applies to federal and District of Columbia contracts over $2,000 for construction, alteration or repair of public buildings or works, and Related Acts extend it to most federally assisted construction. Contractors must pay laborers and mechanics the prevailing wage including fringe benefits, pay weekly, and submit weekly certified payroll records to the contracting agency.
What does managed payroll cost for an engineering firm?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Prevailing wage for government projects, billable hour payroll allocation and PE license classification 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 Engineering & Professional Services Firms. 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: U.S. Department of Labor: Wage and Hour Division
From the blog