Bond guide
Payment bonds
A payment bond guarantees that those who supply labor and materials to a project will be paid.
How it works
Issued with the performance bond at award, the payment bond lets unpaid subcontractors and suppliers seek payment from the surety. On public work it replaces lien rights that do not exist against public property.
Claim basics
- Notice requirements depend on the claimant's tier and the governing law
- Federal projects follow the Miller Act
- State and local projects follow each state's public works bond statute
- Private bonds follow the bond's own terms
For contractors
Prompt payment of subcontractors and suppliers is the best protection against payment bond claims, which sureties track closely and which can affect future capacity.
Frequently asked questions
Who can claim on a payment bond?
Generally subcontractors, suppliers, and laborers who furnished work or materials for the project, within limits set by the bond and the governing law.
Are there deadlines?
Yes. Federal and state laws set notice and lawsuit deadlines, and missing them can bar a claim.
Why do public projects need payment bonds?
Liens usually cannot attach to public property, so the payment bond provides substitute protection.
More bond guides
- Performance bonds for contractors
- Payment bonds
- Bid bonds
- Maintenance bonds
- Supply bonds
- Contractor license and permit bonds
- How to get bonded as a contractor
- Bonding capacity explained
- What determines performance bond cost
- Public works bond laws: the Miller Act and state statutes
- Surety prequalification checklist for contractors
Last updated October 15, 2026 · How we research