A progress claim is a formal request for payment based on the value of work completed during a construction project. Contractors and subcontractors use progress claims to receive payment as construction moves forward instead of waiting until the entire job is complete.
The amount normally reflects measured progress against the contract. The claim can be based on a percentage of work completed, an agreed construction stage or the value of individual work packages.
Progress claims are closely connected with WIP, progress payments and cash flow. As work progresses, the contractor calculates its value, submits a claim and receives payment based on the amount approved.
For smaller contractors managing several projects, keeping these figures aligned is important. A 2026 survey of 754 subcontractors across Australia and New Zealand found that only 8% said they received all their progress claim payments on time. More than a quarter reported typical payment delays of two weeks or longer.
How Do Progress Claims Work in Construction?
Progress claims turn completed construction work into staged payments.
First, the contractor measures the work completed up to the relevant claim date. That value is compared with the contract, previous claims and any changes affecting the current amount.
The claim then moves through a commercial cycle:
- Work completed
- Value measured
- Progress claim submitted
- Claim assessed
- Progress payment approved
- Payment received
A claim does not necessarily equal the amount eventually received. The assessor may approve a different value, retention may be deducted, and payment can arrive later.
Keeping each stage separate helps contractors know what they have earned, claimed and actually collected.
How Is a Construction Progress Claim Calculated?
A progress claim is calculated from the cumulative value of work completed, adjusted for relevant contract changes and previous certified amounts.
A practical calculation is:
- Value of completed work to date
- Plus approved claimable variations
- Less retention
- Less amounts previously certified
- Equals current progress claim
Consider a subcontractor delivering a $120,000 electrical package. Work completed to date is valued at $54,000, and an approved variation adds $4,000. Previous certified claims total $35,000.
If $2,900 is held as retention, the current amount would be $20,100 before GST and any other contract adjustments.
The exact calculation follows the contract and the method used to measure progress.
Percentage Complete Method
Percentage complete measures how much of a defined work package has been delivered.
If plumbing works are valued at $80,000 and verified progress reaches 50%, the completed value is $40,000. Previous certified amounts are then deducted when calculating the current claim.
Milestone or Stage Based Method
Percentage complete measures how much of a defined work package has been delivered.
If plumbing works are valued at $80,000 and verified progress reaches 50%, the completed value is $40,000. Previous certified amounts are then deducted when calculating the current claim.
Schedule of Values Method
A schedule of values divides the contract into individual work items and assigns a value to each.
Progress can then be measured separately across concrete, electrical, plumbing, finishes and other packages. This helps the assessor have a clear base for comparing claimed value with physical progress.
What Is WIP in Construction Progress Claims?
Work in progress, or WIP, represents work that is underway or completed but has not yet been fully reflected through billing or financial recognition.
In progress claim management, WIP helps identify value created on site that has not yet moved through the claiming cycle.
Suppose a contractor has completed $45,000 worth of work but has only claimed $38,000. This leaves $7,000 of completed work that the contractor has not yet included in a progress claim.
This matters because project activity and billing rarely move at exactly the same pace.
A contractor can have substantial work underway while the next claim date is still approaching. Without tracking that position, the business can appear to have less value in progress than it actually does.
How Is Construction WIP Calculated?
For project control, contractors can compare the value of work completed with the amount already claimed.
A simplified operational calculation is:
- Value of work completed to date
- Less cumulative value already claimed
- Equals unclaimed WIP
If completed work is valued at $70,000 and claims submitted to date total $60,000, the contractor still has $10,000 of completed work to include in a future progress claim.
Formal accounting WIP calculations can differ according to the accounting method and reporting requirements used by the business. The operational calculation above is useful for understanding the relationship between site progress and claims, rather than replacing the accounting treatment of WIP.
How Do Previous Claims Affect Your Current Progress Claim?
Each progress claim should account for the value completed to date and deduct amounts certified in previous periods. This ensures the contractor only claims for additional work completed since the last assessment.
Imagine a $150,000 contract where completed work has reached $75,000.
If earlier claims have already certified $58,000, the contractor only needs to claim the additional $17,000 of completed work, rather than claiming the full $75,000 again.
Cumulative tracking also shows how much contract value remains.
This becomes increasingly important as a project moves through repeated claim periods. Every new claim should reconcile with the previous one so the commercial history remains intact.
Claimed vs Approved vs Paid Amounts
Claimed, approved and paid amounts show different stages of the progress payment cycle.
The claimed amount is what the contractor requests.
The approved or certified amount is what the assessor accepts as payable.
The paid amount is what the contractor actually receives.
For example, a subcontractor claims $18,000. The builder assesses $16,500 as payable. After the payment process is completed, $16,500 reaches the subcontractor.
The contractor would need to track the remaining $4,500 as an outstanding payment. Separating these values makes it easier to identify assessment differences without confusing them with late or incomplete payments.
What Is a Progress Payment in Construction?
A progress payment is money paid for an approved portion of construction work completed during the project.
The progress claim requests the money. The progress payment is the amount released after the claim has been assessed and the required deductions have been made.
This distinction is important for financial reporting.
A contractor might have $60,000 in submitted claims but only $48,000 in approved amounts and $40,000 received. Looking only at the submitted total would overstate the cash available to the business.
How Progress Payments Affect Contractor Cash Flow?
Progress payments help contractors recover project expenditure while work is still underway.
The timing rarely matches outgoing costs perfectly. Employees may be paid weekly, suppliers can have fixed credit terms and subcontractor payments can become due before the contractor receives money from the client.
Late progress payments increase that gap.
The 2026 Australia and New Zealand subcontractor survey found that 57% of respondents had increased rates or added a risk margin because of slow or unreliable payments. It shows how payment performance can affect both cash flow and the cost of future construction work.
How Do Variations Affect Progress Claims?
Variations change the value of the work and can increase or reduce the amount available to claim.
The commercial problem arises when site work moves ahead of variation approval.
A subcontractor might complete additional work worth $5,000, but someone could still be awaiting agreement on the variation when the next claim is prepared. The team needs to verify whether the contract allows them to claim that value and track it separately from the original scope.
Maintaining a current variation register helps reconcile the revised contract value with subsequent claims.
How Does Retention Affect Progress Payments?
Retention is an amount withheld from progress payments under the terms of the construction contract.
If $20,000 is approved and the contract requires 5% retention, $1,000 is held and $19,000 remains payable before other applicable adjustments.
Contractors need to track the amount retained across every claim rather than treating it as an ordinary unpaid balance.
The contract determines the conditions and timing for releasing retained funds, so the retention balance should remain visible until it is released.
Progress Claims and Security of Payment in Australia
Security of payment legislation provides statutory payment rights for eligible construction contractors and subcontractors in Australia.
The requirements vary between states and territories. They can affect when a payment claim can be made, what it must contain, how the recipient responds and the time available for each step.
A payment schedule can set out the amount the respondent proposes to pay where it differs from the claimed amount. Adjudication can also provide a route for resolving eligible payment disputes.
Contractors should check the legislation applying to the state or territory where the work is performed rather than using one process across every Australian project.
How Many Progress Claims Can a Contractor Manage in a Year?
The number of progress claims depends on how many projects a contractor runs and the claiming frequency established for each contract.
Monthly claiming can create a significant workload even for a small construction business.
Five active projects operating on monthly claim cycles could create up to 60 claim periods over twelve months. Ten projects could create up to 120.
These figures are examples, not an industry average. There is no reliable Australian survey establishing one standard number of progress claims submitted annually by an SMB contractor.
The workload also continues after submission. Each claim can require assessment tracking, payment follow-up, variation updates and reconciliation against previous periods.
Managing Progress Claims Across Multiple Projects
Managing several progress claims means knowing where each project sits in the payment cycle.
One project might have a claim awaiting assessment. Another could have an approved amount still unpaid. A third may have unclaimed WIP, while another is approaching its next claim date.
The commercial team needs to identify those positions without rebuilding the story from separate spreadsheets, emails and project folders.
A central claim history makes it easier to see upcoming claims, assessment differences, outstanding payments, retention balances and remaining contract value.
How WIP and Progress Claims Reflect Project Costs?
WIP, progress claims and project costs show different parts of project performance.
Project costs show what the business has spent or committed to deliver the work.
WIP shows teams progressing work or value through the project before they fully reflect it in billing or financial recognition.
Progress claims show the value requested for completed work.
Progress payments show how much approved value has turned into cash.
Consider a $100,000 project with $50,000 of completed value. The contractor has claimed $42,000 and received $35,000, while actual and committed costs have already reached $45,000.
Those figures reveal more than the progress claim alone. They show how much value remains unclaimed, how much payment is still outstanding, and how much the project has cost to reach its current stage.
Connecting these figures helps contractors understand both cash flow and expected project margin.
Managing Progress Claims With Construction Software
Progress claim software helps contractors connect the claiming process with the wider financial position of each project.
LiveCosts allows construction teams to manage progress claims alongside project budgets, costs, variations and other commercial records. Contractors can track claimed, assessed and paid amounts while monitoring project costs as work progresses.
This is particularly useful when several projects are running simultaneously.
Rather than treating progress claims as standalone payment documents, contractors can compare the value being claimed with the cost of delivering the work. This helps identify unclaimed value, outstanding payments and potential margin pressure earlier in the project.
Construction Progress Claim FAQs
What is a progress claim in construction?
A progress claim is a formal request for payment based on construction work completed up to a particular date or stage. It allows contractors and subcontractors to receive staged payments while the project is underway.
How do you calculate a construction progress claim?
Calculate the value of work completed to date, add eligible variations, deduct retention and subtract amounts previously certified. The contract determines the exact valuation and adjustment rules.
What is the difference between WIP and a progress claim?
WIP represents work or value progressing through the project that has not yet been fully reflected in billing or financial recognition. A progress claim is the formal request for payment against eligible completed work.
What is the difference between a progress claim and a payment?
A progress claim is the amount requested by the contractor. A progress payment is the amount paid after the claim has been assessed and applicable deductions have been made.
Can variations be included in a progress claim?
Variations can be included where the contract and their approval status allow them to be claimed. Contractors should keep variation values and supporting records current so they can reconcile them with the contract value.
How often can progress claims be submitted?
Claim frequency depends on the construction contract and relevant security of payment legislation. Monthly claim cycles are common, but contractors should follow the requirements for each project.
