Wages, bonds and the rulebook
What is a payment bond?
A payment bond is a surety's guarantee that the contractor will pay its subcontractors and suppliers, and on federal work it is the substitute for the mechanic's lien that cannot be placed against government property.
Also written as: what is a payment bond, subcontractor payment protection federal.
FAR 28.001 defines it as a bond assuring payment as required by law to all persons supplying labour or material in carrying out the work provided for in the contract. FAR 28.102-1 requires it, alongside the performance bond, on federal construction contracts exceeding $150,000.
For a subcontractor this is the single most useful fact in federal construction. You cannot lien a federal building. The payment bond is your remedy, and the Miller Act gives persons supplying labour or material a right of action on it — with statutory notice and timing requirements that are strict enough to be worth reading before you need them.
Ask for a copy of the bond at the start of the job, not when payment goes wrong. The prime is required to furnish it before receiving a notice to proceed.
What this means when you bid
Subcontracting on a federal job: get the payment bond copy up front and diary the statutory notice deadlines. That bond is your only security.
Payment bond: the published figures
Each figure below was read from the regulation cited beside it on 2026-08-04. Thresholds are adjusted for inflation and changed by statute — follow the citation and confirm the figure in effect on your solicitation's date before you rely on it.
- Required on federal construction contracts exceeding
- $150,000
Between $35,000 and $150,000 the contracting officer instead selects two or more alternative forms of payment protection.
FAR 28.102-1 · verified 2026-08-04
Payment bond compared with the terms it gets confused with
Payment bond vs Performance bond
The payment bond runs to the benefit of subcontractors and suppliers; the performance bond runs to the benefit of the government.
What Performance bondmeans →Where this definition comes from
Federal contracting is one of the few fields where the authoritative answer is free, public and one click away. These are the sources this page is built from — go and read them.
- FAR 28.001→
Definitions.
- FAR 28.102-1→
- 40 U.S.C. ch. 31, subch. III→
The Miller Act.
This page explains a term in plain English and cites the authority it comes from. It is not legal advice, and the regulation governs where this page and the regulation differ.
Free tools for government contractors
Knowing the term is one thing. These free tools do something with a payment bond. No login, no credit card.
See the contracts this applies to
A free weekly digest of new government solicitations for your trade and your state, each summarized in plain English by Sam — so you find out about the work while there is still time to bid it.
We email you bid alerts — that's it. No spam, no selling your address. Unsubscribe anytime. Privacy Policy.
Free. No credit card. Unsubscribe any time.
Payment bond— common questions
- What is a payment bond?
- A payment bond is a surety's guarantee that the contractor will pay its subcontractors and suppliers, and on federal work it is the substitute for the mechanic's lien that cannot be placed against government property.
- What is the difference between Payment bond and Performance bond?
- The payment bond runs to the benefit of subcontractors and suppliers; the performance bond runs to the benefit of the government.
- What is the required on federal construction contracts exceeding for Payment bond?
- $150,000, per FAR 28.102-1. Between $35,000 and $150,000 the contracting officer instead selects two or more alternative forms of payment protection. This figure was read from that source on 2026-08-04; thresholds are revised, so check the citation before relying on it in a bid.
- Why does a payment bond matter when you are bidding?
- Subcontracting on a federal job: get the payment bond copy up front and diary the statutory notice deadlines. That bond is your only security.
Related terms
NAICS industries where this comes up most
An editorial pointer, not a measurement. These are the codes whose work most often involves a payment bond. Each page carries the official Census title, the SBA size standard where one is published for those exact digits, and whatever federal award history the record here holds for the code — which may be none, and says so when it is.