Substantial Completion Incentive Calculator

Early completion bonuses incentivize accelerated construction.

Days early (negative if late)

Daily bonus

Daily LD

Contract value

Net incentive

$45,000

Capped amount (10%)

$1,200,000

Raw incentive

$45,000

How the math works

If early: days × bonus. If late: days × LD (negative). Cap at 10% of contract value.

15 days early × $3k = $45k bonus. Capped at $1.2M. Net $45k (under cap).

How to Use

Enter target completion date offset days (early or late).
Enter daily bonus amount.
Enter daily liquidated damages.
Enter contract value.
Read net incentive.

Frequently Asked Questions

Typical incentive rates?

Daily bonus: 1/365 of contract value × 1.5-3 (equivalent 1.5-3 months bonus for full month early). Daily liquidated damages: 0.1-0.3% of contract × days. Symmetric structures common; asymmetric (bonus < LD) is more landlord-favorable.

Structure?

Early completion: +X days × bonus. Late completion: −X days × liquidated damages (LD). Often capped (10% of contract). Incentive structures drive contractor behavior but increase risk premium in bid price.

When used?

Retail openings tied to holiday. Office tenant move-in tied to lease. Hotel openings tied to seasons. Industrial conversions tied to production start. High-stakes openings — incentives often worth 2-5× the cost.

Who owns this risk — sponsor or lender?

Construction risks are typically shared: hard-cost overrun owned by sponsor (via completion guaranty), soft-cost and delay risks shared per contract, force-majeure excused but bears owner carry cost. Document risk ownership in the loan agreement and GC contract before closing. Disputes get expensive when roles are unclear. Institutional deals spell out every allocation in writing.