How Does a Subcontractor Fill Out a Pay Application?

A pay application (pay app) is your monthly bill to the general contractor for work done to date. The GC uses it to build its own pay application to the owner, so your pay app has to arrive in the GC's format and on the GC's schedule. Find three things in your subcontract before the first billing:

• The form. Many GCs use a layout based on the AIA G702 (Application and Certificate for Payment) and G703 (Continuation Sheet). The AIA's summary of G702 describes it as designed for a project where the contractor has a direct agreement with the owner, so many GCs adapt the layout for subs or use their own form. Use whatever your subcontract or the GC's billing instructions require.
• The due date. Often a set day each month, so the GC can bill the owner on time. Late pay apps commonly roll to the next month's billing.
• The attachments. Lien waivers, certified payroll on prevailing-wage jobs, stored-material backup, insurance certificates.

The schedule of values (SOV) splits your subcontract sum into lines: mobilization, each phase of work, major materials, closeout. It is usually agreed with the GC at the start and is not changed without the GC's agreement. It starts from the scope the GC leveled your bid against.

Good SOV lines are small enough to measure and match how the work is actually built. Split material and labor on big-ticket items (fixtures, switchgear) so you can bill materials when they arrive and labor when it is installed. Keep closeout (testing, O&M manuals, as-builts) on its own line, because the GC will hold it until those are delivered.

For each SOV line, work out the percent complete to date and enter this period's share. Bill what is in place, not what is planned. A GC's project manager will check your percentages on site.

Stored materials are materials delivered but not yet installed. Many contracts allow billing them, with backup: the supplier invoice, proof they are on site or in a bonded warehouse, and sometimes insurance or a bill of sale. Federal construction contracts allow payment for material delivered to the site, and off site only where the contract allows it and the contractor shows title (FAR 52.232-5). Once installed, stored materials move into work completed.

No line can bill past 100% of its scheduled value. Extra work needs a change order.

An executed change order (signed by the GC) increases your subcontract sum. Add it to the SOV as a new line with its own scheduled value and bill it like any other line. Do not bill pending or unsigned change orders; many GCs will send the whole pay app back if you do. How the change was priced is in how to price a change order.

Keep a log of change orders by number, with status and amount, and reconcile it with the GC's log every month.

The companies and job are fictional. "Marrow Plumbing" has a $268,400.00 subcontract with a GC, "Stonebridge Builders", on the "Fenwick Library Renovation". Retainage is 10%. Change order 1, for added cleanouts, was executed for $6,350.00 and finished this month. This is pay app 3. Previous billing (pay apps 1 and 2) totals $93,786.16.

This period, above-ground rough-in went from 40% to 65% of its $98,215.40 line, so this period is 25%: $98,215.40 × 0.25 = $24,553.85. Fixtures worth $21,566.38 were delivered and invoiced and are stored on site.

The check: new billing this period is $30,903.85 + $21,566.38 = $52,470.23. Retainage on it is $14,625.64 − $9,378.62 = $5,247.02, and $52,470.23 − $5,247.02 = $47,223.21, the same as the current payment due. Percentages are rounded to two decimals. The retainage post covers how the 10% is reduced and released.

Most GCs require lien waivers with each pay app, because the owner and lender require them from the GC. Two kinds matter, and each comes in a progress-payment and a final-payment version:

• Conditional waiver: gives up lien rights for a stated amount only when that payment is actually received. Send it with this pay app.
• Unconditional waiver: says you have been paid and gives up lien rights for that amount, whether or not the money clears. Send it only after you are paid, usually with the next pay app for the previous payment.

Several states prescribe the wording. Texas makes a waiver unenforceable unless it substantially complies with the statutory form, and sets four forms: conditional and unconditional, for progress and final payment (Texas Property Code § 53.284). Florida provides statutory progress and final payment forms and says a lien right may not be waived in advance (Florida Statutes § 713.20). Other states differ. Use your state's form where one exists, and never sign an unconditional waiver for money you have not received.

• Percentages ahead of the work: the GC's walk does not match your billing.
• Unsigned change orders billed: only executed changes belong on the pay app.
• A missing or wrong lien waiver, or an unconditional waiver for the last payment that never arrived.
• Stored materials without backup: no invoice, no proof of delivery.
• Arithmetic that does not tie: the SOV totals do not match the summary, or previous billing differs from the GC's records.
• Late submission, after the GC's cutoff for this month's owner billing.
• The wrong form, or missing attachments the subcontract lists, such as certified payroll.

When a pay app comes back, fix only the lines the GC flagged and resubmit quickly; most GCs bill the owner on a fixed day.

When a GC runs pay apps in Conflo, a subcontractor submits its own pay app to the GC, against the schedule of values from its subcontract, and the GC rolls approved sub billing into the owner pay app. Each month the sub enters this period's percent complete and any stored materials per line; previous billing carries forward and no line can bill past 100%. Retainage, previous payments and current payment due are calculated to the cent. The sub ticks that its conditional lien waiver is included and picks who at the GC reviews it.

The GC approves it or sends back only the wrong lines, each with a note, and the sub revises and resubmits. A payment tracker shows where the money is, from submitted to paid. A PDF prints in Conflo's own layout, not the AIA forms. Limits today: executed change orders raise the subcontract sum but are not yet lines a sub can bill, on the pay app, waivers are recorded as received dates (the signed waiver documents are requested and reviewed in Compliance), and the subcontract's due date is not tracked.

A pay app that gets paid on time is predictable: the GC's form, the agreed schedule of values, honest percentages, stored materials with backup, only executed change orders, the right waiver, and arithmetic that ties. Get those right every month and the GC has no reason to send it back.

Before your first billing, ask the GC for its form, its cutoff date and its waiver requirements in writing.

See how sub billing works in Conflo's pay apps

1. Summary: G702–1992, Application and Certificate for Payment — AIA Contract Documents (The American Institute of Architects). Read October 16, 2026.
2. FAR 52.232-5, Payments under Fixed-Price Construction Contracts — Acquisition.gov, U.S. General Services Administration. Read October 16, 2026.
3. Texas Property Code § 53.284, Waiver and Release Forms — Texas Legislature. Read October 16, 2026.
4. Florida Statutes § 713.20, Waiver or release of liens — The Florida Senate. Read October 16, 2026.