Progress Payment Certificates in SA Construction: A Complete Guide

Progress payment certificates are the lifeblood of construction cash flow. In South Africa, where delayed payments cost contractors billions annually, understanding how payment certificates work under different contract forms — JBCC, NEC, and GCC — is essential for maintaining healthy cash flow and avoiding disputes.

Unlike traditional businesses that invoice upon delivery, construction contractors must fund materials, labour, and overhead costs upfront, then wait for payment based on work completed. This creates a cash flow gap that can cripple even well-run construction companies. Payment certificates bridge this gap by providing structured, regular payments based on progress.

This comprehensive guide explains what progress payment certificates are, how they work under different South African contract forms, what’s included in calculations, common errors and disputes, and how digital tools can automate the entire process.

What Is a Progress Payment Certificate?

A progress payment certificate is a formal document issued by the principal agent (architect, engineer, or quantity surveyor) that certifies the value of work completed by the contractor and authorises payment by the employer. The certificate serves as both a valuation document and a payment instruction.

Key characteristics:

Valuation document — States the value of work completed to date
Payment instruction — Authorises payment of the certified amount
Legally binding — Creates an obligation on the employer to pay
Regular intervals — Issued monthly or at contract-specified intervals
Net amount — Shows the amount due after deductions

Payment certificates are the mechanism through which contractors receive regular payments throughout the project, rather than waiting until completion. They’re issued under standard contract forms used in South Africa: JBCC (Joint Building Contracts Committee), NEC (New Engineering Contract), and GCC (General Conditions of Contract).

Types of Payment Certificates Across Different Contracts

South African construction uses three main contract forms, each with slightly different payment certificate processes:

JBCC Interim Payment Certificates

Under JBCC PBA 2018 (Principal Building Agreement), interim payment certificates are issued monthly throughout the construction period.

Process:

Contractor submits payment claim by specified date (typically 25th of month)
Principal agent assesses work completed
Principal agent issues certificate within 7-14 days
Employer pays within 14 days of certificate date

Certificate includes:

Gross value of work completed
Value of variations
Total gross value
Retention deduction (typically 5-10%)
Previous payments deducted
Net amount due

Retention release:

50% released at practical completion (penultimate certificate)
Remaining 50% released at final completion (final certificate)

NEC Payment Assessments

Under NEC4 (New Engineering Contract), the project manager assesses payment monthly and issues payment certificates.

Process:

Contractor submits payment application
Project manager assesses payment due
Project manager issues payment certificate
Employer pays within 3 weeks of assessment date

Certificate includes:

Price for work done to date
Amounts due for compensation events (variations)
Amounts to be paid or corrected
Retention (if applicable)
Previous payments
Net amount due

Key differences from JBCC:

More flexible assessment process
Compensation events (variations) handled differently
Different retention mechanisms
Shorter payment period (3 weeks vs 14 days)

GCC Payment Certificates

Under GCC 2015 (General Conditions of Contract), the principal agent issues payment certificates monthly.

Process:

Contractor submits payment claim
Principal agent assesses work completed
Principal agent issues certificate
Employer pays within contract-specified period (typically 14-30 days)

Certificate includes:

Value of work completed
Value of variations
Retention deduction
Previous payments
Net amount due

Retention release:

Typically released at practical completion and final completion
Specific terms vary by contract

The Payment Certificate Lifecycle

Understanding the complete lifecycle helps you manage the process effectively and avoid delays.

Stage 1: Contractor Payment Claim

The process begins when the contractor submits a payment claim (also called a payment application or valuation).

Claim contents:

Statement of work completed during the period
Measurement sheets or supporting documentation
Details of variations claimed
Materials on site (if applicable)
Any other amounts claimed (preliminaries, adjustments, etc.)

Timing:

Must be submitted by contract deadline (typically 25th of month for JBCC)
Late claims may be excluded from current certificate
Include all work completed up to claim date

Best practices:

Submit claims on time, every time
Include detailed supporting documentation
Clearly identify variations and additional work
Use consistent measurement methods
Keep copies of all claims submitted

Stage 2: Assessment by Principal Agent

The principal agent (or project manager under NEC) assesses the contractor’s claim.

Assessment process:

Site inspection to verify work completed
Measurement of quantities completed
Valuation using contract rates
Assessment of work quality
Valuation of variations
Calculation of retention
Deduction of previous payments

Assessment criteria:

Work must be completed to contract standards
Quantities measured accurately
Rates applied from contract or agreed rates
Variations properly authorised
Retention calculated correctly
Previous payments accounted for

Timing:

Must be completed within contract deadline (typically 7-14 days)
Late assessments delay payments
Thorough assessment prevents disputes

Stage 3: Certificate Issuance

The principal agent issues the payment certificate.

Certificate contents:

Certificate number and date
Project name and contract number
Period covered
Gross value of work completed
Value of variations
Total gross value
Retention deducted
Previous payments deducted
Net amount due
Payment due date

Certificate format:

Professional, clear presentation
All calculations shown
Supporting schedules attached (if required)
Signed by principal agent
Copies distributed to all parties

Timing:

Must be issued within contract deadline
Late certificates breach contract terms
Creates payment obligation on employer

Stage 4: Payment by Employer

The employer pays the certified amount.

Payment requirements:

Paid by due date specified in certificate
Paid in full (unless valid set-off)
Paid to contractor’s nominated account
Payment confirmation provided

Timing:

JBCC: 14 days from certificate date
NEC: 3 weeks from assessment date
GCC: Contract-specified period (typically 14-30 days)

Late payment consequences:

Breach of contract
Interest on overdue amounts (if contract provides)
Potential suspension of work by contractor
Damage to relationship

What’s Included in Payment Certificates

Understanding what’s included helps you prepare accurate claims and understand certificate calculations.

Work Done

The primary component is work actually completed during the period.

Included:

Work completed to contract standards
Measured quantities at contract rates
Preliminaries (site establishment, overheads) proportionally
Work completed but not yet measured (at provisional value)

Excluded:

Work not yet started
Defective work (until rectified)
Work not meeting contract standards
Work outside contract scope (unless authorised variation)

Valuation methods:

Bill of quantities rates — Use rates from original bill
Schedule of rates — Use rates from schedule
Proportional valuation — For preliminaries and overheads
Provisional sums — For work covered by provisional sums

Materials on Site

Some contracts allow payment for materials delivered to site but not yet incorporated into work.

JBCC:

Materials on site may be included if contract provides
Typically limited to specific materials (e.g., structural steel, precast concrete)
Must be properly stored and protected
Value limited to contract rates

NEC:

Materials on site handled differently
May be included in payment assessment
Subject to contract terms

GCC:

Materials on site typically not included
Payment only for work completed

Best practices:

Check contract terms for materials on site provisions
Document materials delivered with photos and records
Store materials properly to maintain quality
Claim materials on site only if contract allows

Variations

Variations are changes to the original contract scope, price, or conditions.

Included in certificates:

Authorised variation orders executed during the period
Variations valued using contract methods
Provisional variations (if contract allows)

Excluded:

Variations authorised but not yet executed
Unauthorised work (not variations)
Variations not yet valued

Valuation methods:

Bill rates — Using rates from original bill of quantities
Fair rates — Negotiated rates for work not covered by bill rates
Cost plus — Actual cost plus overhead and profit percentage

Retentions

Retention is a percentage of the gross payment amount held back as security.

Retention rates:

Typically 5-10% of gross value
Varies by contract and project type
Applied to gross value including variations

Retention accumulation:

Retention accumulates throughout project
Total retention = sum of all retention deductions
Released in stages (typically 50% at practical completion, 50% at final completion)

Retention purpose:

Security for defects during defects liability period
Security for incomplete work
Protection for employer

Previous Payments

All previous payments must be deducted from the current certificate.

Included:

All previous interim payment certificates
Advance payments (if any)
Direct payments made by employer
Any other payments under the contract

Payment tracking:

Maintain accurate records of all payments
Ensure no double-counting
Account for payment adjustments or corrections
Verify payment records match bank statements

Adjustments and Corrections

Various adjustments may be included or deducted.

Common adjustments:

Fluctuations (if contract provides)
Advance payment recoveries
Defect deductions (if contract allows)
Set-offs (if contract allows)
Interest on late payments (if applicable)

Adjustment documentation:

All adjustments must be properly documented
Contract terms must allow adjustments
Adjustments should be explained in certificate

Common Errors and Disputes

Payment certificate errors and disputes are costly and time-consuming. Understanding common issues helps prevent them.

Error 1: Late Payment Claims

Problem: Contractor submits payment claim after contract deadline.

Impact:

Claim may be excluded from current certificate
Payment delayed to next certificate period
Cash flow impact
Potential breach of contract

Prevention:

Set reminders for claim deadlines
Prepare claims in advance
Submit claims early, not on deadline day
Use automated systems to track deadlines

Error 2: Incomplete Documentation

Problem: Payment claim lacks supporting documentation.

Impact:

Principal agent can’t assess claim properly
Under-valuation of work
Delayed certificate issuance
Disputes over amounts

Prevention:

Include detailed measurement sheets
Provide photos of work completed
Document variations properly
Maintain clear records

Error 3: Incorrect Retention Calculations

Problem: Retention calculated incorrectly.

Impact:

Over-retention reduces cash flow
Under-retention exposes employer
Disputes over retention amounts
Final account complications

Prevention:

Understand contract retention terms
Calculate retention correctly on gross value
Track retention accumulation accurately
Verify retention calculations

Error 4: Variation Valuation Disputes

Problem: Disagreement over variation rates or scope.

Impact:

Delayed variation payments
Cash flow impact
Disputes and potential adjudication
Project delays

Prevention:

Obtain variation orders before work
Agree rates before executing work
Document variation work thoroughly
Include variations in claims promptly

Error 5: Late Certificate Issuance

Problem: Principal agent issues certificate after contract deadline.

Impact:

Delayed payments
Breach of contract
Potential interest claims
Strained relationships

Prevention:

Principal agent planning and resource allocation
Early contractor claim submission
Automated reminders and workflows
Clear contract deadlines

Error 6: Under-Valuation of Work

Problem: Principal agent values work below contractor’s assessment.

Impact:

Reduced cash flow
Disputes over measurement
Potential adjudication
Project delays

Prevention:

Clear measurement standards
Regular site meetings
Detailed supporting documentation
Fair and transparent process

Digital vs Manual Payment Certificates

The choice between digital and manual payment certificate processes significantly impacts efficiency, accuracy, and cash flow.

Manual Payment Certificates

Process:

Contractor prepares claim manually (spreadsheet or paper)
Principal agent assesses manually
Certificate typed or handwritten
Calculations done manually
Distribution via email or post

Challenges:

Time-consuming — Hours spent on calculations and preparation
Error-prone — Manual calculations lead to mistakes
Slow — Process takes days or weeks
Inconsistent — Different formats and methods
No integration — Separate from project management
Difficult tracking — Hard to track payment status

Costs:

Administrative time
Error correction time
Delayed payments
Dispute resolution costs

Digital Payment Certificates

Process:

Contractor submits claim digitally
System calculates amounts automatically
Certificate generated automatically
Digital distribution and tracking
Integration with project management

Benefits:

Time savings — Automatic calculations eliminate manual work
Accuracy — Automatic calculations reduce errors
Speed — Certificates generated in minutes
Consistency — Standardised format and calculations
Integration — Links with work completion, site diary, variations
Tracking — Real-time payment status visibility

Costs:

Software subscription (typically R2,000-R7,000/month)
Training time (minimal with good software)
Implementation (usually quick)

Return on investment:

Time savings: 10-20 hours per month per project
Faster payments: Reduced payment delays
Error reduction: Fewer disputes and corrections
Better cash flow: Faster certificate generation = faster payments

How Wakha Generates Payment Certificates

Wakha Construction & Property Development Management Software automates the entire payment certificate process, from contractor claims to certificate generation and payment tracking.

Auto-Calculation

Wakha automatically calculates payment certificate amounts:

Work completed — Values work based on progress tracking
Variations — Includes authorised variations at agreed rates
Retention — Calculates retention automatically based on contract terms
Previous payments — Tracks and deducts all previous payments
Net amount — Calculates final amount due automatically

Calculation accuracy:

Eliminates manual calculation errors
Consistent application of contract terms
Automatic retention tracking
Accurate payment history

Multi-Contract Support

Wakha supports all major South African contract forms:

JBCC — Full JBCC PBA 2018 support
NEC — NEC4 payment assessment support
GCC — GCC 2015 payment certificate support
Custom contracts — Configurable for custom contract terms

Contract-specific features:

Contract-specific certificate formats
Contract-specific retention rules
Contract-specific payment periods
Contract-specific variation processes

Digital Signing

Wakha enables digital certificate signing:

Electronic signatures — Principal agent signs certificates digitally
Audit trail — System logs who signed and when
Legal validity — Digital signatures legally valid in South Africa
PDF export — Export signed certificates as PDFs

Signing workflow:

Certificate generated automatically
Sent to principal agent for review
Principal agent signs digitally
Certificate distributed automatically
All parties receive copies instantly

Audit Trail

Wakha maintains complete audit trails:

Claim history — All payment claims recorded
Assessment history — All assessments logged
Certificate history — All certificates tracked
Payment history — All payments recorded
Change history — All changes logged with timestamps

Audit trail benefits:

Complete payment history
Dispute resolution support
Legal compliance
Financial audit support

Payment Tracking

Wakha tracks payments throughout the project:

Certificate tracking — Track certificate status (issued, sent, paid)
Payment due dates — Automatic calculation of payment due dates
Payment receipt — Record when payments are received
Overdue alerts — Alerts when payments are overdue
Payment forecasting — Forecast future payments based on schedule

Payment management:

Real-time payment status
Overdue payment alerts
Payment history reports
Cash flow forecasting

Integration with Project Management

Wakha’s payment certificates integrate with project management:

Work completion — Work completion automatically feeds payment certificates
Site diary — Site diary entries support payment claims
Variations — Variation management integrated with payment certificates
Budget tracking — Payment certificates included in budget tracking
Cash flow — Payment schedule feeds cash flow forecasting

Integrated workflows:

Complete project financial picture
Consistent data across modules
Reduced duplicate data entry
Real-time financial visibility

Builder Plan Features (R2,499/month)

Wakha’s Builder plan includes:

JBCC/NEC/GCC payment certificate generation
Automatic calculation of amounts
Retention tracking and calculations
Payment tracking and monitoring
Digital certificate distribution
Basic reporting

Developer Plan Features (R6,999/month)

Wakha’s Developer plan adds:

Advanced variation management
Multi-contract support with custom configurations
Digital signing workflows
Advanced payment forecasting
Client portal with payment status
API access for integrations
Advanced reporting and analytics

Learn more about Wakha’s payment certificate features or request a demo to see how automated payment certificates can improve your cash flow.

Frequently Asked Questions

What’s the difference between JBCC, NEC, and GCC payment certificates?

The main differences are:

JBCC:

Monthly certificates issued by principal agent
14-day payment period
Standard retention release (50% at practical completion, 50% at final completion)
Clear variation order process

NEC:

Monthly assessments by project manager
3-week payment period
More flexible assessment process
Compensation events (variations) handled differently

GCC:

Monthly certificates issued by principal agent
Payment period varies (typically 14-30 days)
Retention terms vary by contract
More flexible than JBCC

The certificate format and calculation methods are similar, but timing, terminology, and some processes differ. Choose software that supports your contract form.

Can I claim for materials on site that haven’t been incorporated into work?

It depends on your contract. JBCC contracts may allow payment for specific materials on site (e.g., structural steel, precast concrete) if the contract provides for this. NEC and GCC contracts typically don’t allow payment for materials on site. Check your contract terms — if materials on site aren’t included, you’ll only be paid when materials are incorporated into work.

What happens if the principal agent doesn’t issue a certificate on time?

If the principal agent fails to issue a certificate within the contract deadline, this constitutes a breach of contract. You may be entitled to:

Interest on overdue amounts (if contract provides)
Potential suspension of work (if contract allows)
Dispute resolution procedures
Damages for breach of contract

However, try to resolve the issue through communication first before escalating to formal dispute procedures. Late certificates are often due to resource constraints or administrative issues that can be resolved.

How do I dispute a payment certificate if I think work has been under-valued?

If you believe a payment certificate under-values work, you can dispute it:

Review the certificate — Identify specific items you dispute
Gather evidence — Measurement sheets, photos, site diary entries
Notify principal agent — Write formal notice of dispute
Request meeting — Meet to discuss and resolve dispute
Formal procedures — If unresolved, use contract dispute procedures (adjudication, arbitration)

Dispute procedures are typically specified in your contract. Act promptly — most contracts have time limits for disputes.

Can payment certificates be issued for defective work?

Payment certificates should only include work that meets contract quality standards. If work is defective:

Principal agent should exclude defective work from certificate
Principal agent may deduct amounts for defects (if contract allows)
Principal agent may require rectification before certifying payment

However, principal agents must be fair — minor defects that don’t affect functionality may not justify exclusion from payment. The contract typically specifies defect handling procedures.

How does retention work if practical completion is delayed?

If practical completion is delayed, retention release is also delayed. The penultimate certificate (releasing 50% retention) is issued only when practical completion is achieved, regardless of the original programme date. This means:

Retention continues accumulating until practical completion
50% retention release delayed until practical completion
Final 50% release delayed until final completion

Plan for this in your cash flow forecasts — delayed practical completion means delayed retention release.

What’s included in the final payment certificate?

The final payment certificate includes:

All work completed to final completion
All final account adjustments
All variations settled
Remaining retention released (typically final 50%)
All outstanding amounts
Final settlement of contract

The final certificate closes out the financial aspects of the contract. Ensure all variations, claims, and adjustments are included before agreeing to the final certificate.

Conclusion

Progress payment certificates are essential for construction cash flow. Understanding how they work under JBCC, NEC, and GCC contracts — from contractor claims through assessment, certification, and payment — helps you manage the process effectively and avoid costly disputes.

The payment certificate process is complex, with strict timelines, detailed calculations, and multiple parties involved. Manual management is time-consuming, error-prone, and stressful. Digital payment certificate software like Wakha automates certificate generation, calculations, retention tracking, and payment monitoring, ensuring accuracy, compliance, and timely payments.

If you’re managing construction projects and want to streamline your payment certificate process, Wakha can help. With support for JBCC, NEC, and GCC contracts, automatic calculations, digital signing, and payment tracking, Wakha transforms payment certificate management from a burden into a competitive advantage.

Request a demo to see how automated payment certificates can improve your cash flow and reduce administrative burden.

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