.svg)
Payroll
What is Payroll?
Payroll, in the context of the construction industry, refers to the process by which a company pays its employees for their services performed within a specified pay period. It involves determining each worker's compensation, deducting appropriate taxes and other withholdings appropriately, and ensuring the net pay is transferred to the employee. In the construction industry, payroll can be complex due to the varied forms of employments like hourly wages, salaries, or contractual pay, and irregular work patterns. Payroll processes also play an essential role in construction project budgeting and cost management because labor often constitutes an important cost component. Therefore, effective payroll management is crucial in the construction industry.
Trusted by trade contractors across the country
Other construction terms
What is Labor Burden?
Labor burden in the construction industry refers to the additional costs borne by a construction firm beyond direct wages paid to employees. It encapsulates all indirect expenses associated with employing a workforce such as benefits, workers compensation, insurance, PTO, retirement pensions, uniforms, training costs, and equipment among other employment related costs. An accurate understanding of labor burden is crucial for construction firms because it directly impacts bidding and project pricing efficiency. When effectively managed, it can improve a firm's profitability and long-term financial stability. Hence, Labor Burden is a key financial metric in the construction industry.
What are Generally Accepted Accounting Principles (GAAP)?
Generally Accepted Accounting Principles (GAAP) are a set of standardized rules and procedures in accounting to provide consistency in financial reporting across different entities. In the construction industry, GAAP are of particular importance due to the unique nature of accounting involved. For instance, consideration of revenue recognition when recognizing costs for long-term projects is guided by GAAP. Under GAAP, the percentage of completion method is commonly used, allowing companies to report income as the work progresses, thus providing a more accurate view of the financial health of a construction company. Similarly, fixed asset accounting, inventory valuation, recognition of liabilities, and depreciation methods are all guided by GAAP in the construction industry. By adhering to GAAP, the construction industry ensures transparency, consistency, and comparability in its financial information, promoting investor confidence and informed decision-making.
What is Conditional?
In the construction industry, the term "conditional" typically refers to a state or situation where certain obligations, requirements, or criteria must be met for a particular outcome or transaction to occur. This term is often used in contracts or agreements. For instance, a construction project could be conditional upon gaining necessary building permits or approvals, meeting safety standards, or obtaining adequate funding. The failure to fulfill these conditions could suspend or terminate the project.
Ready to end the fire drill and get paid faster?
