Progress payments are the ongoing payments that an owner uses to compensate the contractor during a project. They are typically paid in installments depending on the percentage of work completed or the schedule of values being tracked.
For example, consider the following scenario:
A project Schedule of Values shows Task A worth $12,000, Task B worth $8,500, and Task C worth $25,000. Task A is 18 percent complete, Task B is 2 percent complete, Task C is 7 percent complete. How much should the progress payment be?
Task A – $12,000 x .18 = $2,160
Task B – $8,500 x .02 = $170
Task C – $25,000 x.07 = $1,750
Total = $4,080
So for this stage of the project the contractor would be due $4080 for work completed thus far.