Payroll for Oklahoma Construction Contractors – Subcontractor Risk, Job Costing & Compliance

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Construction payroll is one of the most complex and heavily regulated areas of wage law. Whether you're a general contractor, subcontractor, or specialty trade business in Oklahoma, handling payroll the wrong way can lead to fines, back taxes, and major delays on public projects.


This guide breaks down how to run payroll correctly in the Oklahoma construction industry — including how to classify workers, manage job costing, comply with certified payroll requirements, and avoid IRS and DOL penalties.


1. Subcontractor vs. Employee – Don’t Get Burned


The #1 payroll risk in Oklahoma construction? Misclassifying employees as subcontractors.


Many contractors 1099 their workers thinking it saves money on:


  • Payroll taxes
  • Workers' comp
  • Unemployment insurance


But the IRS and Oklahoma Employment Security Commission (OESC) don’t care what you call someone — they care about how much control you have.


If your subcontractor:


  • Uses your tools or truck
  • Wears your uniform or safety gear
  • Works a regular schedule you assign
  • Can’t work for other clients


...you probably owe payroll taxes, overtime, and back wages.


Learn more: Certified Payroll & Prevailing Wage »

2. Davis-Bacon Compliance for Public Projects


If you work on a federal, state, or municipal project, you're likely subject to Davis-Bacon Act rules. That means you must:


  • Pay prevailing wages for each worker classification
  • Submit weekly certified payroll reports (Form WH-347)
  • Provide a signed statement of compliance
  • Track fringe benefits accurately


Failing to comply with certified payroll can result in:


  • Withheld payments
  • Debarment from future contracts
  • Wage restitution
  • False Claims Act exposure


Our CPA-led payroll system generates accurate certified payroll reports and includes fringe benefit tracking for Oklahoma construction firms.


3. Job Costing: The Foundation of Construction Profitability


Labor is your biggest cost on any job — and if you're not tracking it correctly, you're flying blind.


Your payroll system should:


  • Allocate labor hours and wages by job and cost code
  • Generate job costing reports for bid analysis
  • Allow supervisors or crew leads to submit time by project
  • Integrate with accounting and project management systems


At Boulanger CPA, we set up job costing inside your payroll platform — so you know exactly where your labor dollars go.


4. Overtime, Bonuses & Per Diem – Track It Right


Construction often involves:


  • Overtime
  • Shift differentials
  • Production bonuses
  • Per diem for travel or lodging


Each of these has different payroll and tax treatment.


For example:


  • Per diem must follow IRS rules to be non-taxable
  • Bonuses must be included in the regular rate for overtime calculations
  • Overtime is required for all non-exempt employees working more than 40 hours/week


We help contractors build CPA-compliant pay codes for each scenario.


5. Union and Non-Union Payroll


If you run a mixed shop, or are signatory to one or more union agreements, your payroll system must:


  • Track union rates and fringes separately
  • Handle dues and deductions
  • Report contributions to the appropriate trust
  • Generate certified reports with union job classifications


Our team supports both union and non-union shops with customizable payroll configurations that meet contractor and auditor standards.


6. Time Tracking Must Be Job-Specific


You can't just track total hours. For job costing, compliance, and payroll accuracy, you must:


  • Track hours by job site
  • Track hours by job code or role (e.g., operator vs. laborer)
  • Separate prevailing wage vs. standard wage time


We offer mobile-compatible timekeeping solutions that let your crew clock in by job, cost code, and GPS-verified location.


7. Final Paychecks and High Turnover


Construction has high turnover — and final pay matters.


Every time a worker leaves:


  • You must issue their final paycheck promptly
  • You must include all earned wages, overtime, and taxable bonuses
  • You must provide a W-2 at year-end (not a 1099 unless truly a contractor)
Read: What Oklahoma Contractors Need to Know About Payroll Compliance »

FAQs – Construction Payroll in Oklahoma


Q: Can I 1099 a worker if they use their own tools?
Not necessarily. The IRS and OESC look at behavioral and financial control. Tools are just one factor.

Q: What if I paid someone under the table and now need to correct it?
You likely need to file late 941s and issue W-2s. We help contractors clean up prior payroll years and get current.

Q: How do I know which prevailing wage rate applies?
It depends on the contract, job type, and county. We can help you interpret wage determinations.

Q: Can I average hours across weeks to avoid overtime?
No. Overtime must be paid for any week where more than 40 hours were worked.

Q: Do I need separate payroll systems for union vs. non-union workers?
Not necessarily — we can configure one system to handle both with proper classification and reporting.


Payroll Built for Oklahoma Construction Companies


At Boulanger CPA, we help Oklahoma contractors, subs, and trade businesses manage:


  • Job-costed payroll
  • Certified payroll reporting (WH-347)
  • Prevailing wage compliance
  • Contractor vs. employee classification
  • IRS, OTC, and OESC filings
  • Payroll cleanup for past errors
Schedule a Free Construction Payroll Consultation
View Transparent Per-Employee Pricing


Professional Image of Marc Boulanger, CPA

Marc Boulanger


Marc views his accounting business as an extension of his family. And while he holds a Bachelor of Arts in Business Administration and Accounting and a Masters of Science in Accounting, he values traveling around the country with his wife of 30 years and 5 kids, Marc learned that communication is the key to effective team work.


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