Prevailing Wage and Fringe Benefits on Certified Payroll

David Gul · Last updated September 18, 2026

A Davis-Bacon prevailing wage has two parts: a basic hourly rate and an hourly fringe benefit amount, listed side by side in the wage determination for each classification. The contractor must pay at least the sum of the two. The basic rate must be paid in cash. The fringe part can be met by contributions to bona fide benefit plans, by paying the equivalent in cash on top of the basic rate, or by a combination, and the certified payroll shows which. A rate that looks generous but leaves the fringe unmet is the most common finding on a reviewed payroll.

Reading the determination

A line in a wage determination reads something like: Laborer, rate 22.50, fringes 8.10. The obligation for an hour of laborer work is 30.60. The contract clause, 29 CFR 5.5(a)(1), says the contractor may discharge the fringe part by paying the benefits as stated, by paying another bona fide fringe benefit, or by paying an hourly cash equivalent. Any mix that reaches 30.60 in total, with at least 22.50 of it in cash, complies.

How it is paid	Cash rate	Plan contributions per hour	Cash in lieu per hour	Meets 30.60?
All in cash	22.50	0.00	8.10	Yes
Health plan covers part	22.50	5.00	3.10	Yes
Higher cash rate, no plan	30.60	0.00	0.00	Yes
Cash rate a dollar short	21.50	0.00	8.10	No, short 1.00 an hour

The last row is the classic error. The cash rate is close, the fringe is being paid, and the payroll is still a dollar an hour short for every hour worked, which becomes restitution owed with interest.

What counts as a fringe benefit

The Act lists the kinds of benefits that count: medical or hospital care, pensions on retirement or death, compensation for injuries or illness from occupational activity, insurance to provide any of those, unemployment benefits, life insurance, disability and sickness insurance, accident insurance, vacation and holiday pay, defraying the costs of apprenticeship or similar programs, and other bona fide fringe benefits. Contributions must be made irrevocably to a trustee or third party under a bona fide plan, or be paid in cash.

What never counts: anything the law already requires the employer to pay. FICA, workers’ compensation premiums and unemployment insurance are legal obligations, not fringe benefits, and cannot be credited against the determination. Neither can the contractor’s own administrative costs, travel and lodging for workers sent away from home, the use of a company truck, or a holiday bonus.

Unfunded plans

A plan where the contractor sets money aside on its own books rather than paying a third party is an unfunded plan. Credit for an unfunded plan needs the Department of Labor’s prior approval under 29 CFR 5.28; without it, the contribution does not count and the fringe must be paid another way.

How it appears on Form WH-347

• Column 6A is the cash hourly rate paid. On the January 2025 revision this is the wage only; cash paid in lieu of fringe is not folded into it.
• Column 6B is the total fringe benefit credit for the week: the hourly amount paid into plans, multiplied by the worker’s total hours across all classifications.
• Column 6C is the payment in lieu of fringe: the hourly cash paid instead of plans, multiplied by the hours. Cash in lieu is part of the worker’s gross; plan contributions are not.
• Page 2, paragraph 4 says which of those routes was used, and the exceptions table explains any mix.

Fringe on overtime hours

Fringe is owed on every hour worked, overtime hours included, at the straight fringe rate. It is never multiplied by one and one-half, and it is not part of the base the overtime premium is figured on. The overtime guide has the arithmetic.

More in this series: Overtime on Certified Payroll: The Rate, the Base and the Hours · How to Fill Out Form WH-347, Column by Column · All certified payroll guides