HOW TO PRICE PREVAILING WAGE WORK.
Prevailing wage work is priced wrong more often than almost any other bid type in commercial construction. The fringe benefit requirements, the certified payroll compliance overhead, and the true all-in labor cost are all consistently underestimated. Here's the complete framework for pricing prevailing wage work correctly so you're not subsidizing every public project you win.
Three costs get missed on prevailing wage bids, and they compound. Fringes get priced at the base rate instead of the determination rate. The certified payroll administration nobody bids for gets absorbed into overhead. And the fringe election, cash versus a qualifying plan, moves payroll taxes and workers comp on every hour worked. Get all three wrong and you win the public job at a number that never covered the work, with the compliance administration donated on top of it.
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WHAT IT MEANS.
The total prevailing wage is the base wage plus the fringe benefits required by the applicable wage determination, and it's the rate a prevailing wage bid has to be priced off.
WHERE IT GOES WRONG.
You're using the wrong labor rate in your bids
Prevailing wage bids have to be based on the total prevailing wage, base wage plus fringe benefits as required by the applicable wage determination. Most subcontractors price the base wage correctly and underestimate the fringe cost. Fringe benefits on prevailing wage work, meaning health, pension, vacation, annuity, and training fund, can add $8 to $20 per hour per employee above base wage depending on the wage determination and your fringe election strategy.
You're not accounting for certified payroll overhead
Certified payroll administration, meaning weekly WH-347 reports, fringe documentation, and apprenticeship ratio tracking, creates overhead that private work doesn't require. Most prevailing wage contractors never price that compliance overhead into the bid. That means providing it free to every public project owner they work for, on every job, forever.
Your fringe benefit election strategy is costing you money
Prevailing wage fringe benefits can be paid as cash added to wages or as contributions to qualifying benefit plans. The election affects your true labor cost, your certified payroll calculations, your payroll tax treatment, and your bid competitiveness. Most subcontractors default to cash fringes without working out which election method is most cost effective for their own workforce and benefits structure.
WHAT IT LOOKS LIKE IN DOLLARS.
For a journeyman electrician with a $45 base wage and $18 in fringe requirements, true all-in labor cost may be $75 to $85 per hour before overhead and profit. Price that number, not $45. The difference between the two is the whole reason prevailing wage jobs finish under bid.
THE THREE THINGS THAT FIX THE BID.
True prevailing wage labor cost equals base wage, plus fringe benefits at the wage determination rate, plus the FICA employer share, plus FUTA, plus SUTA, plus workers comp at the applicable classification rate, plus general liability allocated to labor. For a journeyman electrician with a $45 base wage and $18 in fringe requirements, true all-in labor cost may be $75 to $85 per hour before overhead and profit. Price that number, not $45.
SPM analyzes fringe benefit election strategy for prevailing wage clients, comparing cash fringe payments against qualifying benefit plan contributions to find the most cost effective approach. The right election depends on your current benefit offerings, your workforce composition, and your payroll tax exposure. The analysis is built into the ControlQore setup for prevailing wage clients, so every bid uses the correct labor cost basis.
Certified payroll administration overhead, typically 1 to 3% of prevailing wage labor cost depending on project complexity and the number of workers, belongs in prevailing wage bids either as a line item or loaded into overhead. SPM quantifies that overhead for prevailing wage clients and makes sure it reaches the bid overhead rate instead of getting absorbed silently.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
Built for subs doing $1M to $12M. Above $12.5M we quote.
| Last 12 months revenue | Core | Strategic | Platinum | One-time onboarding |
|---|---|---|---|---|
| Under $1M | $1,900 | $3,100 | $3,300 | $2,500 |
| $1M to $3.5M | $2,600 | $4,100 | $5,300 | $4,500 |
| $3.5M to $6.5M | $3,800 | $5,900 | $8,300 | $6,000 |
| $6.5M to $9.5M | $5,100 | $7,600 | $11,800 | $7,500 |
| $9.5M to $12.5M | $6,100 | $8,900 | $14,900 | $9,000 |
| Above $12.5M | Quoted | Quoted | Quoted | Quoted |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers, and it moves with your revenue band. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Just want the setup? Onboarding only is the same onboarding work with no monthly service after it, one time, at the onboarding fee plus $2,000. Start a monthly engagement later and $2,000 counts toward it. It starts at $4,500, and the price for every band is on the pricing page.
The three tier columns are the whole price. Which one fits depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
- Online software only: QuickBooks, Sage, Viewpoint and similar. No VPN or hosted desktop.
- Not in any tier: payroll, pay applications, collections on receivables.
- Pricing valid through 2027.
CFO work. Your own bookkeeper keeps doing the books.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
Core, plus bookkeeping and bank reconciliations, plus job costing and WIP software set up and managed for you. Use your own online accounting software or we supply it, one price.
Every job shows its margin while it is still open.
Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we cover it.
A bookkeeper we choose does the books and reconciliations. No payroll.
Strategic, plus a controller who handles payables and receivables the way an in-house controller would. You approve every payment.
You approve, and the money side gets handled.
Everything in Strategic, plus a controller we choose who handles your bills and receivables for you the way an in-house controller would. They call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
A controller we choose does the payables and receivables. No payroll, no pay applications, no collections.
FREQUENTLY ASKED.
