Fringe benefit statement: what it shows, and a worked example
A fringe benefit statement is the part of your certified payroll that shows how a health, pension, vacation, or training plan contribution gets converted into an hourly credit against the prevailing wage, instead of every dollar being paid straight in cash. The mechanics below come from the current federal Form WH-347 and the U.S. Department of Labor's own worked example.
What the statement actually shows
Every wage determination lists a total per diem rate for a craft: a basic hourly rate plus a separate fringe amount for health and welfare, pension, vacation, and sometimes training. You can meet the fringe portion three ways: pay it all in cash on the check, pay it into a bona fide plan and take an hourly credit for it, or split it between the two. Whichever you pick, the certified payroll has to say so, worker by worker, in dollars and cents per hour, not as a monthly premium or a lump plan payment. That per hour breakdown is the fringe benefit statement. It is not a separate filing you invent from scratch. On federal Davis-Bacon work it is built into the WH-347's Statement of Compliance. On California public works it is the employer payment field on the DIR eCPR record, covered in our California certified payroll guide.
Cash, a plan, or a mix
Under Davis-Bacon rules, a contractor's wage obligation "may be met by any combination of cash wages and creditable bona fide fringe benefits," and the whole determination rate, base plus fringe, "may be paid entirely as cash wages" if you choose, per the Department of Labor's Davis-Bacon compliance principles page. California's version of the same idea sits in Labor Code section 1773.1: the fringe portion of the prevailing rate can be satisfied through employer payments to a plan, and those payments are a credit against your obligation, not a separate cost stacked on top. Either way, no worker's total ends up lower for the choice; only where the money goes changes.
How to calculate the hourly credit
- Find the plan's actual cost for the period. Premiums, contributions, or the reasonably anticipated cost of an unfunded bona fide plan, for that worker.
- Annualize it. DOL regulations at 29 CFR 5.25(c), described on the same compliance principles page, require contractors to annualize fringe benefit contributions to find the hourly equivalent, rather than crediting a big monthly payment against a single short workweek.
- Divide by hours worked in the period. The contribution amount divided by the hours it covers gives the hourly credit.
- Compare it to the determination's fringe rate. Whatever the plan does not cover has to be paid in cash to reach the full rate.
DOL's own worked example, from that same page: an electrician works 160 hours in a month, and the wage determination sets $26.00 as the basic hourly rate plus $12.50 in fringe benefits. The contractor provides medical insurance costing $800 for the month. Divide $800 by 160 hours and the allowable fringe benefit credit is $5.00 per hour. That leaves $7.50 of the required $12.50 fringe rate not covered by the plan, and that $7.50 still has to reach the worker, in cash, to hit the full $38.50 per hour the determination requires.
| WH-347 field (2025 revision) | What it means | This worker, this week |
|---|---|---|
| Column 6A, hourly wage rate paid | Straight cash rate on the check | $26.00 |
| Column 6B, total fringe benefit credit | Hourly value of the plan contribution | $5.00 |
| Column 6C, payment in lieu of fringe benefits | Cash paid for the part of the fringe rate the plan does not cover | $7.50 |
| Total per hour | Must meet or beat the determination | $38.50 |
The current WH-347, revised January 2025 under OMB control number 1235-0008, carries the fringe benefit statement itself on the back page: a certification that "fringe benefits have been paid in cash and/or to bona fide fringe benefit plans, funds, or programs," followed by an "hourly credit for fringe benefits" grid where you name each plan, its type, its plan number, whether it is funded or unfunded, and the hourly credit claimed for each worker. That grid, filled in with the numbers from the table above, is the fringe benefit statement a reader searching for an example is usually picturing.
What counts as a bona fide fringe benefit
Federally, a bona fide fringe benefit is a contribution irrevocably made to a trustee or third party, or the reasonably anticipated cost of a written, communicated, financially responsible unfunded plan, per the Department of Labor's Davis-Bacon FAQ, question 29. Examples the FAQ lists: life insurance, health insurance, pension, vacation, holidays, and sick leave. Payments a law already requires you to make, Social Security, unemployment insurance, workers' compensation, do not count toward the fringe credit.
California's list, in Labor Code section 1773.1(a), covers health and welfare, pension, vacation, travel, subsistence, apprenticeship training under Labor Code section 3093, and industry advancement or administrative funds tied to a collective bargaining agreement. The definitions in Title 8 of the California Code of Regulations, section 16000, add medical, dental, and vision coverage, retirement plans, and occupational injury pay to that list. As on the federal side, benefits another state or federal law already requires you to provide do not count toward the credit.
Where it lives on your California filings
DIR's eCPR asks for the same information the WH-347 does, employer payment amounts entered as hourly rates per worker rather than as a payroll period total, per DIR's eCPR FAQ, which is one of the format mismatches that trips up a straight spreadsheet export into the upload tool, covered in our eCPR upload errors guide. Training fund contributions run through the same hourly logic and their own CAC-2 filing, walked through in our training fund contributions guide.
How often the money has to move
Neither side lets you park the obligation until year end. Federally, 29 CFR 5.5(a)(1)(i), quoted on DOL's compliance principles page, requires contributions to fringe benefit plans to be made regularly, not less often than quarterly. California's Labor Code section 1773.1(d) allows the same relief valve: contributions do not have to land in the same pay period as the wages, as long as the employer makes them regularly, on no less than a quarterly basis. Either way, quarterly is the floor, not a target.
If the plan does not cover the whole fringe rate
Employer payments are a credit against your obligation under Labor Code section 1773.1(c), and the underlying obligation, to pay not less than the general prevailing rate of per diem wages, is set by Labor Code section 1771. A credit only offsets an obligation, it does not erase the part it does not reach. So if your plan contribution works out to less than the determination's fringe rate, the remainder is still owed, and the only place left for it to go is the worker's paycheck, the same mechanic as WH-347 column 6C above.