How to Handle Payroll and Subcontractor Payments in Construction Bookkeeping

Construction bookkeeping plays a critical role in keeping construction businesses financially stable and compliant. Payroll and subcontractor payments are two of the most sensitive areas, and even small mistakes can lead to delays, penalties, or legal issues. This guide explains how to manage both clearly and correctly while keeping projects on track.

Introduction to Construction Bookkeeping

Construction bookkeeping is different from standard bookkeeping. It focuses on tracking costs by project, managing job costing, and maintaining detailed records for payroll and subcontractors. Accurate construction bookkeeping helps you see true project costs, monitor cash flow, and measure profitability.

A strong system also supports compliance, audit readiness, and insurance or bonding requirements. With organized records, construction companies can make informed decisions and keep projects within budget.

Union vs Non-Union Payroll

Union payroll often includes union dues, benefit contributions, and wage rates defined by union agreements. These details must be tracked carefully by project.

Non-union payroll is simpler but still requires accurate hour tracking, overtime calculation, and tax reporting.