Certified Payroll – Employees, 1099 Workers & Subcontractors
Certified Payroll reporting requirements for employees, 1099 workers and subcontractors causes confusion for many contractors working on prevailing wage/government funded construction projects. This question was submitted by a reader.
I’m very confused about certified payroll reporting requirements. My workers are 1099’d so what do I put in the hours and withholding part? What if I hired a subcontractor for the completion of the job? Any help would be appreciated. Thank you ~~ Diane
The certified payroll report that your company submits to a general contractor, project owner, or contract administrator should contain information about your W-2 employees, the ones that work directly for you, are paid via payroll checks issued by your company and who you provide a W-2 for wages earned at the end of the year.
When you enter into a formal contract for a portion of the prevailing wage/government funded construction project with a subcontractor, the subcontractor will submit a certified payroll report from his company to yours, listing their employees, the work classifications they fell under, hours worked on the project, wages, taxes, deductions, etc. You will then make a copy of the report for your records and include his report with yours. It is quite likely, that at the end of the year you would issue the subcontractor a 1099 at the end of the year (consult your tax preparer about these requirements).
If you hire worker’s from a construction staffing agency to perform work on the jobsite, the staffing agency in essence becomes a subcontractor and many of them are equipped to provide you with a certified payroll report, which you would make a copy of for your records and submit the staffing agencies report along with your own report.
As for 1099 workers, make sure that you are correctly classifying these workers – or you could be in trouble with the IRS and your local State Department of Labor.
The IRS defines an independent contractor as:
People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer (your company) has the right to control or direct only the result of the work and not what will be done and how it will be done.
The worker is not an independent contractor if they perform services that can be controlled by an employer (what will be done and how it will be done).
For more information about Independent Contractor (Self-Employed) or Employee, visit the IRS website.
To learn more about certified payroll reporting requirements, sign up to attend our live 2-hour webinar – held each month.
We hope you’ve found this post to be helpful, if so please take a moment to leave a comment or to share it with others on your favorite social media platform.
2 Responses to Certified Payroll – Employees, 1099 Workers & Subcontractors
Leave a Reply
- The Great Debate – QuickBooks Desktop vs. QuickBooks Online
- Using Account Numbers in Your QuickBooks Chart of Accounts
- QuickBooks Creating a More Meaningful Payroll Expenses Section
- Calculating & Displaying Fringe Benefits on a Certified Payroll Report
- QuickBooks Tip - Child Support Garnishments
- How To Turn On and Use Manual Payroll in QuickBooks
- Create a QuickBooks Job Cost Report With Hours & Payroll Costs
- QuickBooks Payroll Tip - Tracking Employee Advances or Loans
- QuickBooks Tip - Job Costing Starts With A Simple Item
- QuickBooks for Contractors Tip – Basics of Progress Invoicing
- QuickBooks Tip-Creating a Functional Payroll Liabilities Section
- Welcome to the QuickBooks for contractors blog
- QuickBooks Tip: Important Facts About Items Left as Billable
- QuickBooks Tip-Handling Employee Reimbursements for Expenses
- QuickBooks Tip - Determing Cost of Goods Sold
- Straight from the IRS - Social Security Tax Reduced to 4.2%
- QuickBooks 2015 Announced - Important System Requirements
- QuickBooks 2013 Upgrade Do's, Don'ts & Frequent Questions
- QuickBooks Tip - Handling Retainage
- QuickBooks 2012 - Frequently Asked Questions About Upgrading