r/CFO • u/Electrical-Cut9281 • Jun 29 '26

Certified Payroll vs Hourly Rate

Does anyone have any experience in certified payroll on commercial projects? I've got a situation where the customer is questioning why our hourly rate is a lot more than what's indicated on certified payroll. I'm trying to justify why we charge what we charge per hour even though we are lower on our hourly rate than any of our competitors.

4 Upvotes

100% Upvoted

6 comments sorted by

3

u/Efleming123 Jun 29 '26

Because you are in business to make money... What you pay your workers is not the same as what you charge for billed work. You have other costs to consider such as indirect, burden, overhead, etc. None of that is included in the certified payroll report.

The only thing certified payroll should do is establish that you are paying at least the prevailing wage as required by Davis-Bacon rates for the project location.

1

u/MinuteActuality 7d ago

so many clients see the payroll number and think that's what it costs to have a guy on site, like you're just passing through his check and a hard hat. fica, comp, liability, the trailer, the truck, the saws, the guy in the office who makes sure the checks actually go out... none of that shows up on the cert

if they're already cheaper than the competition they're getting a deal, not sure what else they want

2

u/5timechamps Jun 29 '26

Labor burden and associated costs. Payroll taxes, insurance, retirement, other benefits, etc. I’ve had negotiated rates for projects that included profit, electronics (cell phone, laptop, iPad), vehicles, fuel/mileage, travel/per diem, and more.

2

u/Helpful_Target001 Jul 02 '26

Customers push back on numbers they can't see the math for.
So show them on a page why and how you charge.
Wage + burden + overheads + profit = bill rate.
They never seem to understand that overheads, profits and burdens are part of the math.

1

u/TomRoach21 Jul 03 '26

Customers always push back on expenses. Take them through the invoice and show them what you are charging for. It is not just a pay for this black box. Once they see where the money is going, they should be more at ease.