What are the four types of payroll?: In general, there are four types of payroll, mainly based on how often an organization pays its employees. In weekly payroll, employees receive their payments on a weekly basis, which results in 52 payment cycles per year and is mostly used for employees who are paid on an hourly basis. In bi-weekly payroll, employees are paid on a bi-weekly basis, resulting in 26 pay periods per year.

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This type of payroll is one of the most commonly used types of payrolls in the USA. In semi-monthly payroll, employees receive payments twice a month, mostly on set dates like 15th and last date of every month, and the total number of pay periods is 24 per year.

Monthly payroll means that an organization makes payments to its employees only once a month, and thus, there will be 12 pay periods every year.

There are four main types of payroll processing that businesses employ to facilitate the payment process. Depending on the resources, management capability, and complexity of compliance at your construction firm, any one of the following can be considered.

In-House Payroll

In this case, the owner of the business, or an internal HR/accounting department will manage all facets of payroll calculation and reporting by means of special software.

• Advantages: Total data control and comprehensive overview of job costing.
• Disadvantages: Heavy load on administration and high risk if the internal department is not entirely aware of the constantly changing legislation.
• Specifics for Construction: Many medium-size and large companies opt for the in-house solution, which is thoroughly discussed in our review of Foundation Software vs. Sage 100 Contractor.

Outsourcing Payroll

In this type of payroll processing, the company entrusts the whole process of payroll to an outside agency that takes care of everything from processing timecards to tax withholding.

• Advantages: Relief from administrative load and transfer of responsibility in case of errors to the agency.
• Disadvantages: Monthly fee for the services and less control over payroll processing frequency.

• Construction Industry Context: The construction industry usually leverages services such as those offered by Payroll4Construction Review to take care of complicated tasks of certified payroll and fringe benefit calculations involving union members.

Fully Managed Payroll

This is another method of outsourcing where the service provider will integrate with your timekeeping software, do the direct deposits in many states and address notices from the tax authorities.

• Advantages: Close to fully automated; perfect for growing organizations that do not want to have too many people in the back office.
• Disadvantages: The most expensive type of outsourced payroll and hard to customize for organizations with special needs.
• Construction Industry Context: Most organizations evaluating enterprise-level Human Capital Management (HCM) software options (for instance, the ones compared in ADP Workforce Now vs. Paychex Flex) prefer fully managed payroll options.

Self-Service (SaaS) Payroll

In this scenario, there will be cloud-based payroll platforms wherein the employer will access the software via a portal, add in the number of hours or any modification made in it, and automatically receive tax calculation and payments from the payroll platform.

• Advantages: Incredibly economical and also easy to use software for both employers and employees.
• Disadvantages: The employer has to make sure the data added is correct and the tax filing process is done correctly by the software.
• Construction Industry: Whereas smaller stores may consider a Gusto Review or QuickBooks Payroll vs Gusto comparison, they usually lack the specialized capability of job costing as discussed in the Comprehensive Guide to Payroll Software for Construction.

Matching Your Payroll Model with Your Business Structure

Selecting the right payroll type, either in-house, outsourcing or managed one is an essential consideration when it comes to profitability. This is especially true for enterprise-level companies where the accountancy processes have to be incorporated in your ERP system; thus the importance of What is CMiC in Accounting?

If your company finds it difficult to manage field time and payroll tax processing, the following will help:

• How Can Construction Payroll Software Be Beneficial for Your Company?
• What is the Most Appropriate Payroll Software for Construction?
• Dedicated analysis like CMiC Enterprise Review or Viewpoint Vista Review.

If you already use some SaaS-based solutions and face some issues that prevent you from working further, you may check How Do I Contact Intuit QuickBooks Payroll Support? or Does QuickBooks Payroll Provide Live Chat Support?. Using mobile automation tools like WorkMax Time will be helpful in connecting your field activities with these four payroll software solutions.