Payment Bond Cost Calculator

Payment bonds guarantee payment to subs. This calculator sizes the premium.

Contract amount

Contractor rating

Project complexity (1-5)

Bond premium

$102,000

Premium % of contract

1.20%

Combined w/ performance

$193,800

How the math works

Premium scales with contract, rating, and complexity.

Complex projects (multi-trade, multi-phase) price 15-25% higher. Sureties underwrite actual scope risk, not just contract size.

How to Use

Enter contract amount.
Enter contractor rating.
Enter project complexity (1-5).
Read bond premium.

Frequently Asked Questions

Payment vs performance?

Payment bond protects subs and suppliers from non-payment. Performance bond protects owner from non-completion. Public projects typically require both; private often one or neither.

Combined cost?

Performance + payment bonds together usually run 1.5-3.5% of contract, slightly cheaper than sum of each separately. Ask for combined quote to avoid double-pricing risk assessment.

Who pays?

Contractor pays premium, passes through as line item on contract. Owner effectively funds. Clean billing treatment critical — premium is not hidden, is fully disclosed.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.