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Pay application glossary for subcontractors

Updated November 3, 2026.

General information, not legal advice. Laws change and your contract matters. Check the linked statutes and talk to an attorney about your situation.

Pay applications come with their own vocabulary. This glossary explains the terms a subcontractor in North Carolina or South Carolina is likely to see on a pay app, a lien waiver or a subcontract. Every term has its own link, so you can send someone straight to one, such as retainage.

Each definition is labelled. Practice means common industry usage, not law: your contract and your GC's forms decide. Law points link to the statute on the North Carolina General Assembly's or South Carolina Legislature's website.

Jump to: Pay application (pay app) · Schedule of values (SOV) · Scheduled value · Continuation sheet · Application summary (summary page) · Original contract sum · Contract sum to date · Work completed from previous applications · Work completed this period · Materials presently stored (stored materials) · Total completed and stored to date · Percent complete · Balance to finish · Retainage · Retainage vs retention · Retainage release · Change order · Pending change order (change order request) · Net change by change orders · Less previous certificates for payment · Current payment due · Front-loading (overbilling) · Pay application cutoff date · Pencil copy (pencil draft) · Lien waiver · Conditional lien waiver · Unconditional lien waiver · Partial vs final lien waiver · Pay-if-paid · Pay-when-paid · Prompt payment act · Substantial completion · Beneficial occupancy · Punch list · Lien agent (NC) · Notice to Lien Agent (NC) · Notice of furnishing (SC) · Notice of project commencement (SC) · Early-finishing trades (NC public) · Certified payroll

Terms

Pay application (pay app)

Practice: the document a contractor or subcontractor sends to request payment for work done in a billing period, usually monthly. It normally has a summary page and a continuation sheet, and your GC may require its own form or portal.

Schedule of values (SOV)

Practice: the breakdown of your contract sum into line items that add up exactly to it. Every pay app bills against it, so get it approved before the first one. The AIA says it "does not publish a standard schedule of values form" (AIA G702 instructions).

Scheduled value

Practice: the dollar amount assigned to one line of the schedule of values.

Continuation sheet

Practice: the page of a pay app with one row per schedule-of-values line, showing the scheduled value, previous work, work this period, stored materials, total to date, percent complete, balance to finish and retainage. The AIA's G703 is a well-known example. The AIA says to fill in the continuation sheet first and carry its totals to the summary page (AIA G702S instructions).

Application summary (summary page)

Practice: the first page of a pay app. It runs from the original contract sum, through change orders, work completed and stored, retainage and earlier payments, to the current payment due. The AIA's G702 is a well-known example.

Original contract sum

Practice: the subcontract price when the subcontract was signed, before any change orders.

Contract sum to date

Practice: the original contract sum plus or minus the net change by change orders.

Work completed from previous applications

Practice: the work already billed on earlier pay apps for a line. Check that it matches the totals on your last pay app.

Work completed this period

Practice: the value of work done on a line during this billing period only.

Materials presently stored (stored materials)

Practice: materials paid for or delivered but not yet installed, billed with backup such as invoices, photos and proof of insurance. Many contracts limit billing for materials stored off site.

Law (NC public): for the 50%-complete retainage test only, off-site stored materials don't count and on-site stored materials count up to 20% of gross invoices (G.S. 143-134.1(b1)(2)).

Total completed and stored to date

Practice: previous work, plus work this period, plus materials presently stored, for a line or for the whole pay app.

Percent complete

Practice: total completed and stored to date divided by the scheduled value of a line.

Balance to finish

Practice: the scheduled value of a line minus the total completed and stored to date. Some forms show it including retainage, since retainage is still unpaid.

Retainage

Practice: a percentage of each payment held back until the work, or your part of it, is complete. Law: North Carolina and South Carolina limit it on some jobs. See retainage rules in North Carolina and retainage rules in South Carolina.

Retainage vs retention

Practice: two names for the same thing; contracts and forms use either word. South Carolina's state procurement code heads its rule "Retention" (S.C. Code § 11-35-3030(4)), while North Carolina's statute says "retainage" (G.S. 143-134.1).

Retainage release

Practice: the payment of retainage that was held back, usually billed on a separate final or retainage pay app.

Law (NC public): due within 60 days after a pay request once the owner has a certificate of substantial completion or beneficial occupancy, as the contract specifies (G.S. 143-134.1(b1)(4)). Law (SC state jobs): released by division, with the prime passing your share on within ten days of receiving it (S.C. Code § 11-35-3030(4)(b)).

Change order

Practice: a signed agreement that changes the scope, price or time of the contract. Bill a change order once it's executed, as its own line on the schedule of values.

Pending change order (change order request)

Practice: extra or changed work that hasn't been approved yet. Most GCs won't pay it on a pay app until it's signed, so bill it separately so it doesn't hold up the rest.

Law (NC public): additive change orders aren't a basis for delaying the release of retainage (G.S. 143-134.1(b1)(5)).

Net change by change orders

Practice: the total of all approved additive change orders minus all deductive ones.

Less previous certificates for payment

Practice: the total already approved for payment on earlier pay apps. Subtracting it from the total earned less retainage gives this period's payment due.

Current payment due

Practice: what you're asking to be paid this period: total completed and stored to date, less retainage, less previous certificates for payment.

Front-loading (overbilling)

Practice: putting more value on early schedule-of-values lines, or billing a higher percent complete, than the work is worth. GCs often send front-loaded pay apps back.

Pay application cutoff date

Practice: the day of the month by which the GC needs your pay app so it can go into the GC's own application to the owner. Your subcontract or the GC's billing instructions set it.

Pencil copy (pencil draft)

Practice: a draft pay app sent to the GC for review before the final, signed one.

Lien waiver

Practice: a document in which you give up some or all of your lien rights, usually in exchange for a payment. See lien waivers in NC and SC.

Law (NC): an agreement to waive lien rights in anticipation of and in consideration for the awarding of a contract is against public policy and unenforceable (G.S. 44A-12(f)).

Conditional lien waiver

Practice: a waiver that takes effect only when the stated payment is actually received. Usually signed with the current pay app.

Unconditional lien waiver

Practice: a waiver that takes effect when signed, whether or not you've been paid. Sign one only for money that has cleared.

Partial vs final lien waiver

Practice: a partial (progress) waiver covers one payment, through a stated date. A final waiver gives up all remaining lien rights on the job, so it should only go with the final payment, retainage included.

Pay-if-paid

Practice: a contract clause that makes the owner's payment to the GC a condition of the GC paying you.

Law (NC): "Payment by the owner to a contractor is not a condition precedent for payment to a subcontractor ... and an agreement to the contrary is unenforceable" (G.S. 22C-2). Law (SC): the owner's payment to the contractor "is not ... a condition precedent for payment to the construction subcontractor. Any agreement to the contrary is not enforceable" (S.C. Code § 29-6-230).

Pay-when-paid

Practice: a contract clause about the timing of your payment, tied to when the GC is paid. The statutes linked here don't use the term, and how a court reads a particular clause is a question for an attorney.

Law (NC and SC): once the GC receives a periodic or final payment, it has seven days to pay you for your work (G.S. 22C-3; G.S. 143-134.1(b); S.C. Code § 29-6-30).

Prompt payment act

Practice: the usual name for state laws that set payment deadlines and interest on late payments. Law: in North Carolina, Chapter 22C (private jobs) and G.S. 143-134.1 (public jobs); in South Carolina, Title 29, Chapter 6. The late payment interest calculator applies them to your dates.

Substantial completion

Practice: the stage when the work is complete enough for the owner to use it for its intended purpose, with only minor items left. Your contract defines it.

Law (NC public): retainage release can be triggered by the owner's receipt of "a certificate of substantial completion from the architect, engineer, or designer in charge of the project" (G.S. 143-134.1(b1)(4)).

Beneficial occupancy

Practice: the owner starting to use the project, or part of it, for its purpose. Law (NC public): the owner receiving "beneficial occupancy or use of the project" is the other trigger for releasing retainage (G.S. 143-134.1(b1)(4)).

Punch list

Practice: the list of minor items to finish or fix near the end of a job, usually made at or after substantial completion.

Law (NC public): when releasing retainage, the owner may keep funds for work to be completed or corrected, but no more than two and one-half times its estimated value (G.S. 143-134.1(b1)(4)).

Lien agent (NC)

Law (NC): the agent, chosen from the Department of Insurance's list of registered lien agents, that the owner must designate for improvements costing $40,000 or more, except improvements to an owner-occupied existing single-family home (G.S. 44A-11.1).

Notice to Lien Agent (NC)

Law (NC): the notice a potential lien claimant gives the lien agent. On jobs with a lien agent, one of the conditions for perfecting a claim of lien on real property is that the lien agent received it no later than 15 days after you first furnished labor or materials (G.S. 44A-11.2(l)).

Notice of furnishing (SC)

Law (SC): a notice that a sub-subcontractor or supplier to a subcontractor sends the contractor by certified or registered mail. Without it, their liens are limited to what the contractor owes the subcontractor they supplied (S.C. Code § 29-5-20(B)).

Notice of project commencement (SC)

Law (SC): a notice that a person contracting with the owner may file with the clerk of court or register of deeds within fifteen days of the start of work. If none is filed, the notice-of-furnishing limit in § 29-5-20(B) doesn't apply (S.C. Code § 29-5-23).

Early-finishing trades (NC public)

Law (NC public): trades 100% complete by the time the project is 50% complete, such as structural steel, piling, caisson and demolition, whose retainage is reduced to 0.5% of the contract once their work is approved (G.S. 143-134.1(b2)).

Certified payroll

Practice: weekly payroll reports with a signed statement of compliance, required on some public and federally funded jobs. Your contract says whether a job needs them.

AIA, G702 and G703 are registered trademarks of The American Institute of Architects. PayClear is not affiliated with or endorsed by the AIA.

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Sources

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