Pay Application
Also known as: pay app · application for payment · AIA G702
A pay application is the monthly invoice a subcontractor submits for work completed during a billing period. It states the percentage complete of each schedule-of-values line item, subtracts retainage and previous payments, and arrives at the amount currently due.
Pay applications commonly use standard AIA forms — G702 for the summary and G703 for the continuation sheet detailing each line — though many general contractors use their own format or a portal.
The billing cycle
- Cut-off dateMost projects bill to a fixed monthly cut-off, commonly the 25th. Work completed after it goes on next month's application, so finishing a large area two days late can push its billing a full month.
- Submission and approvalYour application goes to the GC, who compiles it with every other trade into their own application to the owner. Errors get kicked back, and a rejected application usually waits for the next cycle.
- PaymentThe owner pays the GC, and the GC pays you. Contracts frequently include pay-when-paid or pay-if-paid clauses, which is why the gap between submitting and being paid is commonly 60 to 90 days rather than 30.
Supporting documents gate the payment
Lien waivers, certified payroll on public work, and updated insurance certificates are routinely required with each application. A missing document holds the whole payment, and nobody chases you for it — the payment simply doesn't arrive.
Related terms
- Schedule of ValuesA schedule of values is a breakdown of a subcontractor's total contract price into individual line items, each with its own dollar value. It is submitted after award and becomes the basis for monthly progress billing — you invoice the percentage complete of each line.
- RetainageRetainage is a percentage of each progress payment withheld by the owner or general contractor until the work is complete and accepted. Five to ten percent is commonly seen, and it is released after substantial completion and closeout.
- Lien WaiverA lien waiver is a document in which a contractor, subcontractor, or supplier gives up their right to file a mechanics lien against a property, in exchange for payment. General contractors typically require one with every pay application.