AIA G702 and G703: a subcontractor pay-app guide

On most commercial jobs in the United States, you do not get paid until an AIA G702 and G703 pay application is filled out, signed, and certified. The G702 is the one-page cover that summarizes what you are owed this period. The G703 is the continuation sheet behind it, where your schedule of values is broken out line by line and the actual math happens, including the retainage that the owner holds back from every draw. Fill the pair out cleanly and your application gets certified and paid on schedule. Get the continuation sheet wrong, especially the retainage column, and you either leave money on the table or trip a rejection that pushes your payment a full cycle.

We built SubTrade inside Quality Gypsum Services, a commercial drywall contractor in Calgary, Alberta, so our home paperwork is Canadian. But the pay-application logic is universal, and plenty of Canadian subs work US jobs or for US-based GCs who run on AIA forms. Here is how the two forms actually work, and what the Canadian equivalent looks like at the end.

What the G702 and G703 are

They are a matched pair from the American Institute of Architects, and they are always used together.

The G702, Application and Certificate for Payment, is the summary. It is the single page the general contractor and architect sign. It carries the headline numbers: your original contract sum, approved change orders, total earned to date, retainage, what you have already been paid, and the current payment due.

The G703, Continuation Sheet, is the detail behind that summary. It is your schedule of values laid out as a table, one row per line item, with columns that track how much of each line is complete, how much material you have stored, and how much retainage is being held. The G702 totals are just the bottom of the G703 carried up to the cover.

You cannot do one without the other. The G703 is where the work is; the G702 is where it gets certified. If you are still setting up the line items behind all this, start with a clean schedule of values, because the G703 is only as good as the SOV it is built on.

Filling out the G702, line by line

The cover page reads top to bottom as a running calculation:

1. Original contract sum. Your awarded contract value before any changes.
2. Net change by change orders. The sum of approved change orders, plus and minus.
3. Contract sum to date. Lines 1 and 2 added together.
4. Total completed and stored to date. This comes straight off the G703 total. It is everything you have earned, work in place plus stored materials.
5. Retainage. The amount held back this period, also totaled from the G703 (more on this below).
6. Total earned less retainage. Line 4 minus line 5.
7. Less previous certificates for payment. Everything already billed and certified on prior applications.
8. Current payment due. Line 6 minus line 7. This is the cheque.
9. Balance to finish, including retainage. What is left on the contract.

The single most common G702 error is mismatched totals: the numbers on the cover do not tie to the continuation sheet because someone edited one and not the other. Certifiers catch it immediately, and it bounces the whole application.

Filling out the G703 continuation sheet

The continuation sheet is a table, and each column does a specific job. Reading left to right:

Column G is the number that matters most: total completed and stored to date. Column H, percent complete, is what the certifier eyeballs against reality on site. If your G column says a line is 90 percent done and the field says it is half framed, expect that line to get cut.

The retainage column, and how to get it right

Column I is where subcontractors most often lose money without noticing. Retainage is the percentage the owner withholds from each payment, commonly 5 or 10 percent, and holds until the work is substantially or fully complete. On a G703, that withholding is calculated on the total completed and stored (column G) for each line and totaled at the bottom, where it feeds line 5 of the G702.

Two things trip people up. First, the retainage rate can change partway through a job, for example dropping from 10 percent to 5 percent at 50 percent completion, and the column has to reflect that or you under-bill. Second, retainage on stored materials is sometimes treated differently than retainage on installed work, depending on the contract. Read your specific agreement, because the standard form does not decide this for you.

Because the arithmetic compounds across every line and every draw, it is worth checking your numbers against a calculator rather than trusting a spreadsheet you have not audited. You can run your exact figures, by state and by rate, with our free construction retainage calculator, then reconcile the total against column I before the application goes out. If you want the conceptual difference between US retainage and Canadian holdback first, we lay it out in retainage vs. holdback.

Where pay applications go wrong

The percentages do not match the field. The fastest way to get an application rejected is to bill ahead of the work. Certifiers walk the job. Bill what is actually in place.

Stored materials have no backup. Column F gets scrutiny. If you are billing for stored material, expect to show invoices, and often proof of bonded or insured storage. No backup, no payment on that line.

Change orders are billed before they are approved. A change order only belongs in the contract-sum math once it is signed. Billing unapproved extras on the G702 is a common rejection, and it is why chasing signatures on your change orders matters as much as the estimate.

The retainage total is wrong. Covered above, and worth repeating because it is the quietest leak.

Nobody kept the running total straight. Column D, work completed previously, has to carry forward correctly from application to application. One bad month and every draw after it is off. This is exactly the kind of running total that field-connected progress billing keeps for you instead of a spreadsheet that drifts.

The Canadian equivalent: progress draws, CCDC 9A, and holdback

Canada does not use AIA forms. If you are billing a Canadian job, the equivalent of a G702/G703 application is a progress draw, also called a progress claim, submitted against your schedule of values, usually on the GC's own form or a simple continuation sheet that looks a lot like a G703.

Two things replace the US retainage mechanics:

Statutory holdback instead of retainage. Rather than a contractual retainage percentage, Canadian jobs carry a statutory holdback set by each province's construction or builders' lien legislation, commonly 10 percent, held back from every payment and released a set period after substantial completion. It is a legal requirement, not just a contract term. You can see what should be sitting in that holdback fund on your job with our construction holdback calculator, and the province-by-province rates in holdback by province.

A CCDC 9A statutory declaration. On many Canadian progress draws you also sign a CCDC 9A statutory declaration, a sworn statement that you have paid your own subs and suppliers for prior draws. It is often required before the GC will release the current payment, so a missing or late 9A stalls the draw the same way a bad retainage column stalls a G702.

The workflow rhymes with the US one: break the contract into a clean schedule of values, bill the percentage complete each period, account for the money held back, and back it up with the right paperwork. The forms differ; the discipline does not. SubTrade starts at $299/month CAD with a 14-day free trial and no credit card required, and it runs the schedule of values, the progress draw, and the holdback in one place.

FAQ

What is the difference between the AIA G702 and G703?

The G702 is the one-page Application and Certificate for Payment, the cover that summarizes and certifies what you are owed this period. The G703 is the Continuation Sheet behind it, where your schedule of values is broken out line by line and the actual completed, stored, and retainage figures are calculated. The G702 totals come from the G703.

How is retainage calculated on a G703?

Retainage is a percentage, commonly 5 or 10 percent, withheld from the total completed and stored to date (column G) on each line, then totaled at the bottom of the sheet and carried to the G702. Watch for a rate that steps down partway through the job and for contracts that treat retainage on stored materials differently from installed work.

Can I bill for stored materials on a pay application?

Yes, in column F of the G703, but expect to provide backup: supplier invoices and often proof of bonded or insured on-site storage. Stored-material lines get scrutinized, and without documentation they get cut from the certified amount.

Do Canadian contractors use AIA G702 and G703 forms?

Usually not. Canadian jobs use a progress draw or progress claim against a schedule of values, with statutory holdback instead of contractual retainage and often a CCDC 9A statutory declaration. The logic mirrors the AIA pay application, but the forms and the holdback rules are different.

What is the most common reason a pay application gets rejected?

Billing ahead of the work. Certifiers verify percent complete against what is actually in place, so a G703 that overstates progress on any line gets that line cut or the whole application bounced. Close behind are unapproved change orders billed early and an incorrect retainage total.

What is the Canadian version of retainage on a pay application?

Statutory holdback. Instead of a contractual retainage percentage, each province's lien legislation requires a holdback, commonly 10 percent, withheld from every payment and released a set time after substantial completion. It is a legal obligation rather than a negotiated contract term.