Payroll reporting is the process of documenting and reporting your employee payroll figures to your insurance carrier for workers compensation and general liability premium calculation. Your workers compensation premium is directly based on payroll dollars by class code, and many CGL policies also use payroll as a rating basis for roofing operations. Accurate and timely payroll reporting is essential to avoid large year-end audit adjustments that strain your cash flow.
Most carriers require payroll reporting on a monthly, quarterly, or annual basis. Some offer pay-as-you-go programs integrated with your payroll provider that report automatically with each pay period. When reporting payroll, break it down by NCCI class code so that office employees, drivers, and roofing crew members are each reported under their correct classification. Include gross wages, salaries, commissions, and bonuses. Overtime pay can typically be reported at straight-time rates because the overtime premium (the extra half) is excluded from auditable payroll in most states.
Common payroll reporting mistakes that cost roofing contractors money include failing to separate clerical payroll from field payroll, not excluding overtime premiums, including payments to properly insured subcontractors in your payroll figures, and underreporting during the year only to face a massive audit bill later. Keep your payroll records organized by classification code throughout the year. If you hire temporary laborers through a staffing agency, those wages may be excluded from your payroll if the agency provides their own workers compensation coverage. Verify the staffing agency's insurance status and maintain certificates on file to support exclusion at audit.