Why Payroll Corrections Cost Construction Companies $14K/Year
The Hidden Cost of "Fixing It Monday": Why Payroll Corrections Are Killing Your Profit Margins
It's 2:30 PM on a Friday.
You're reviewing timesheets one last time before submitting payroll. Everything looks... fine. Well, mostly fine. Jake's hours seem a little high. Sarah's job codes don't quite match the project schedule. And you're 80% sure the crew worked the Maple Street job on Wednesday, but nobody wrote it down clearly.
But payroll's due in 30 minutes. So you make your best educated guess, double-check the math one more time, and hit submit.
"If anything's wrong, we'll fix it Monday."
Famous last words.
Monday morning, 7:14 AM. Your phone's already buzzing. Jake's direct deposit is short six hours. Sarah's overtime didn't calculate right. And now you're pulling up QuickBooks to make manual adjustments or calling your payroll company.
Welcome to the most expensive "we'll fix it later" in your business.
The Correction You See (And the Ten Costs You Don't)
Here's what most construction companies think a payroll correction costs:
20-30 minutes to resubmit corrected hours
Maybe a call to your payroll processor
Done, right?
Wrong.
That's like saying a crack in your foundation only costs the price of the caulk. You're missing the structural damage, the water intrusion, and the property value loss happening underneath.
Let's talk about what payroll corrections actually cost your business.
Cost #1: The Resubmission Tax
Most payroll processors charge $15-$35 per correction. If you're making 2-3 corrections per month, that's $360-$1,260 per year just in fees. And that's before we get to the real damage.
Some processors like ADP or Paychex build correction fees into your contract. Others hit you with "off-cycle" charges. Either way, you're paying for your data quality problems.
Cost #2: Your Time (The One Nobody Counts)
Every correction requires:
✔️ Time to figure out what actually happened
✔️ Time to pull the right hours from... somewhere
✔️ Time to make the correction in your system
✔️ Time to resubmit to your processor
✔️ Time to explain to the employee why their pay was wrong
✔️ Time to verify the correction actually went through
You're not spending 20 minutes. You're spending 45-90 minutes per correction.
If you're making $75,000 per year, that's $36 per hour of your time. Three corrections per month = $1,296 per year of your time alone.
But it gets worse.
Cost #3: The Trust Erosion
This one doesn't show up on your P&L, but it's costing you every single day.
When Jake's paycheck is wrong, he doesn't think "oh, honest mistake." He thinks:
"Does my boss even track my hours?"
"Should I be keeping my own time log to protect myself?"
"Maybe I should look for a company that can pay me correctly"
In a labor market where good workers have options, trust is everything. Every payroll correction is a deposit in the "maybe I should leave" account.
Cost #4: The Friday Verification Scramble
Here's the thing—even when you DON'T make corrections, you're living in fear that you will.
So every Friday becomes this ritual of:
❌ Calling crew leads for verbal confirmation
❌ Squinting at illegible time cards
❌ Playing detective: "Was he at the Johnson site or the Miller site?"
❌ Second-guessing every entry
❌ Holding your breath when you hit "submit"
That anxiety? That time spent verifying because you don't trust your data? That's costing you 2-4 hours every single week, whether you make corrections or not.
Cost #5: The Project Manager Time Drain
Your project managers should be... managing projects.
Instead, they're spending hours every week:
❌ Trying to remember who worked where
❌ Reconstructing job codes from memory
❌ Taking calls from the office: "Are you sure Mike worked 10 hours Wednesday?"
❌ Fixing last week's errors
That's time they're not spending on bids, client relationships, or keeping projects profitable.
Cost #6: The Monday Morning Disruption
Monday, 7:00 AM. You've got a crew ready to start a new job.
But three guys are on the phone with you about their pay from last week. Your project manager is trying to get them to the job site. You're trying to fix payroll. And everyone's starting 45 minutes late because of problems that happened five days ago.
Cost #7: The Compound Effect on Job Costing
Here's what kills profitability—when your time data is wrong, your job costing is wrong too.
You can't bid accurately on future projects because you don't actually know what labor cost on past projects. You're estimating based on faulty data.
In construction, bad labor estimates turn profitable jobs into break-even jobs. Or worse.
Cost #8: The Dispute Spiral
It starts small. Jake says he worked 45 hours. Your records show 40.
Who's right?
Nobody knows. Because you're relying on handwritten time cards filled out from memory three days after the fact.
So you split the difference, pay him 42.5 hours, and now BOTH of you are unsure. He thinks you shorted him. You think he's padding hours. The relationship is damaged.
Cost #9: The Compliance Exposure
Department of Labor audits happen. Wage and hour lawsuits happen. Workers' comp audits happen.
And when they do, you need records proving:
✅️ Exactly when employees worked
✅️ Exactly where they worked
✅️ Exactly how you calculated their pay
If your records are "crew lead's best guess written down Wednesday for Monday's work," you're exposed. Wage violation penalties start at $1,000 per violation and go up from there.
Cost #10: The Opportunity Cost (The Killer)
This is the big one.
Every hour you spend on payroll corrections is an hour you're not spending:
Bidding new projects
Building client relationships
Training your team
Actually making money
Your time is your most valuable resource. And you're burning it fixing data that was collected wrong in the first place.
Is Your Payroll System Costing You Money?
☐ You make 1-3 payroll corrections per month
☐ Friday afternoons = anxiety about whether hours are right
☐ You rely on crew lead memory or illegible time cards
☐ Employees question their pay regularly
☐ You can't prove exactly when/where work happened
If you checked 2 or more, your current system is costing you $10,000+ annually.
So What's the Real Cost?
Let's add it up for a construction company making just 2-3 payroll corrections per month:
✔️ Payroll processor correction fees: $900/year
✔️ Your time fixing errors: $1,300/year
✔️ Project manager time: $2,400/year
✔️ One employee leaving due to pay issues: $6,000
✔️ Friday verification anxiety: $3,000/year
✔️ Compliance risk exposure: $1,000/year
✔️ Lost job costing accuracy: $2,000/year
Total: $16,600 per year
And that's conservative. Many companies double or triple that.
For what?
For data you collected wrong in the first place.
The Real Problem (Nobody Talks About This)
Here's the truth:
The problem isn't that you're bad at payroll. The problem is you're trying to fix data in the office that was captured wrong in the field.
Think about the process:
❌ Crew lead fills out time cards at end of day (or week) from memory
❌ Handwriting is illegible
❌ Details are fuzzy ("I think we were at the Miller job Tuesday?")
❌ Job codes get confused or forgotten
❌ By the time it reaches your desk, you're guessing
❌ You can't fix a data collection problem with better spreadsheets or more verification calls.
❌ You fix it by collecting accurate data at the source—where and when the work actually happens.
What Top Contractors Do Differently
The contractors who never make payroll corrections? They stopped collecting time in the office.
They started capturing it at the job site, in real-time, with GPS verification.
Here's what that looks like:
✅️ Crew clocks in at the job site (one tap on their phone)
✅️ GPS automatically captures location (proof of where they were)
✅️ They select job code at clock-out (while on site and it's fresh)
✅️ Data flows directly to payroll (no handwriting, no memory, no mistakes)
When time is captured where work happens, with GPS verification built in, payroll becomes boring.
Which is exactly what payroll should be.
No Friday anxiety. No Monday corrections. No disputes about who worked where.
Just clean data in, confident payroll out.
The Bottom Line
Payroll corrections aren't a minor inconvenience. They're a symptom of a broken system costing you thousands of dollars and countless hours every year.
The good news? You don't have to accept it as "part of doing business."
You can fix it at the source. Capture time where work happens. Verify it with GPS. And never second-guess your payroll submission again.
Because the real cost of payroll corrections isn't the $25 processor fee. It's what those corrections are doing to your profit margins, your team's trust, and your Friday afternoons.
Frequently Asked Questions
How much do payroll corrections actually cost?
Beyond the $15-35 processor fee, payroll corrections cost construction companies an average of $16,600 annually when you factor in time spent fixing errors, employee disputes, Friday verification time, and compliance risks.
What causes most payroll correction errors?
Most errors come from collecting time data incorrectly in the field—memory-based time card entries, illegible handwriting, forgotten job codes, and no verification that people were where they said they were.
How can construction companies prevent payroll corrections?
The most effective prevention is GPS-verified time tracking that captures accurate data at the job site when workers clock in and out, eliminating memory-based errors and disputes.
Ready to submit payroll with confidence? See how GPS-verified time tracking captures clean data at the job site—so you never second-guess your payroll submission again.
