# Payroll, Certified Payroll & Sales/Use Tax
## Payroll & labor burden
Track the **fully burdened** cost of labor — not just wages, but payroll taxes, workers' comp, and benefits. Burden often adds 20–40%+ to base wages and must hit your job costs to price work correctly.
## Certified payroll
On **public works** jobs (federal **Davis-Bacon**, state prevailing-wage), you must pay **prevailing wages** and submit **certified payroll reports** documenting each worker's hours, classification, and pay. Errors bring penalties and withheld payment — take it seriously.
## Sales & use tax
Rules vary by state, but generally:
- **Sales tax** may apply to materials you buy (or to the contract, depending on the state and whether you're a retailer vs. consumer of materials).
- **Use tax** applies to materials used on a job where sales tax wasn't paid.
Mishandling contractor sales/use tax is a common, costly audit issue — get your CPA's guidance for each state you work in.
## The point
Compliance (payroll, prevailing wage, tax) is part of job cost and risk. Build it into your estimates and your books from day one.
**Takeaway:** Build labor burden, prevailing wage, and sales/use tax into your estimates from day one.
> *Educational content — not legal, accounting, or licensing advice. Rules vary by state and change; verify with the licensing board and a CPA.*
