What a pay application is, line by line
A pay application is the bill a subcontractor sends the general contractor each month against the schedule of values. The continuation sheet lists every line with the work completed to date, and the cover sheet totals it, takes out retainage and what earlier pay apps billed, and ends at the amount due.
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The two pages of a pay app
A pay app has two parts that always travel together. The continuation sheet is the detail: one row for every line of the schedule of values, showing what was billed before, what is billed now, and what is left. The general contractor's project manager checks each row against the work in the field.
The cover sheet is the summary. It is the page the GC's accounting team approves and pays from, and every figure on it comes from the continuation sheet, so the two have to agree to the cent.
The example below is pay app #3 on the sample job used across this site, Riverside Medical Office Building, billed by Halden Iron Works to Corbett & Lane Builders for September 1 to 30, 2026. The sample is a stairs and railings package. The sheets look the same in any trade that bills against a schedule of values.
The continuation sheet, column by column
Here are three of the job's lines as they appear on the continuation sheet: one finished this period, one partway along, and one billed for the first time.
| Item # | Description | Scheduled Value | Previous Applications | This Period | Materials Stored | Total Completed | % Comp | Balance to Finish | Retainage |
|---|---|---|---|---|---|---|---|---|---|
| 1.2 | Stair 2, steel pan stair with concrete-filled treads | 73,600.00 | 36,800.00 | 36,800.00 | 0.00 | 73,600.00 | 100.0% | 0.00 | 3,680.00 |
| 2.1 | Interior picket guardrail at stairs and atrium | 59,450.00 | 20,807.50 | 17,835.00 | 0.00 | 38,642.50 | 65.0% | 20,807.50 | 1,932.13 |
| 2.2 | Wall-mounted handrail, 1-1/2 in. pipe | 18,240.00 | 0.00 | 9,120.00 | 0.00 | 9,120.00 | 50.0% | 9,120.00 | 456.00 |
Each column answers one question. Take line 2.1, interior picket guardrail at stairs and atrium:
- Scheduled Value is what the line is worth in the contract, $59,450.00. It stays the same once the GC approves the schedule of values.
- Previous Applications is the work billed on this line in all earlier pay apps, $20,807.50. It has to match what the last pay app showed as completed.
- This Period is the work done since the last pay app, $17,835.00.
- Materials Stored is material bought and delivered, or stored for the job, but not yet installed. This line has none, so it shows $0.00.
- Total Completed adds the three: $38,642.50 of work completed and stored to date.
- % Comp is Total Completed divided by Scheduled Value, 65.0%.
- Balance to Finish is what is left to bill on the line, $20,807.50.
- Retainage is 5% of Total Completed, rounded to the cent on the line: $1,932.13.
The cover sheet, line by line
The cover sheet turns the continuation sheet into one number: what the GC owes this period. Here is pay app #3's.
| Line | Amount |
|---|---|
| 1. Original Contract Sum | $317,290.00 |
| 2. Net Change by Change Orders | $6,850.00 |
| 3. Contract Sum to Date (1 + 2) | $324,140.00 |
| 4. Total Completed & Stored to Date | $272,462.50 |
| 5. Retainage (5.00%) | $13,623.13 |
| 6. Total Earned Less Retainage (4 - 5) | $258,839.37 |
| 7. Less Previous Applications for Payment | $160,272.12 |
| 8. Current Payment Due (6 - 7) | $98,567.25 |
- Original Contract Sum is the signed contract, $317,290.00.
- Net Change by Change Orders counts approved change orders only. Change order 2 for $11,130.00 is still waiting on a signature, so it isn't on this pay app.
- Contract Sum to Date is lines 1 and 2 together.
- Total Completed & Stored to Date is the continuation sheet's Total Completed column, added up.
- Retainage is the Retainage column added up: the sum of each line's rounded retainage, rather than a percentage of line 4. That is what keeps the two sheets in agreement.
- Total Earned Less Retainage is line 4 less line 5.
- Less Previous Applications for Payment is what earlier pay apps billed: $57,368.12 on pay app #1 and $102,904.00 on pay app #2.
- Current Payment Due is line 6 less line 7, $98,567.25. It is also the amount of the invoice that goes with the pay app, invoice 1021.
Where change orders go
Change order 1, roof access ladder, added $6,850.00 to the contract. It doesn't change any original line. It gets a line of its own, CO1.1, below the original contract on the continuation sheet, with its own subtotal, and the cover sheet carries it on line 2.
Keeping change orders apart lets the GC see the original contract and the changes at a glance, and the original scheduled values stay the same from the first pay app to the last.
Why GCs send pay apps back
Pay apps tend to come back for a handful of reasons:
- The cover sheet and the continuation sheet don't add up to the same figures. Retainage figured on the total instead of line by line is a common cause.
- Billing ahead of the work. If a line shows more complete than the superintendent sees in the field, expect the GC to cut it back.
- A change order billed before it is approved.
- Previous Applications that don't match what the last pay app billed, often after the GC adjusted the last one.
- Stored materials without the backup the GC asks for, such as supplier invoices or photos.
- A billing period that overlaps the last one.
Billing periods and cutoff dates
Each pay app covers one billing period, usually a calendar month. Pay app #3 covers September 1 to 30, 2026.
Many GCs set a monthly cutoff for pay apps, and some want a draft first so they can mark it up before the final. Your subcontract should say when the pay app is due and what backup goes with it. A pay app that misses the cutoff can slip to the next month's cycle.