What should a construction invoice include?

A construction invoice needs all standard invoice fields (your info, client info, invoice number, dates, totals) plus construction-specific sections: a breakdown of labor by trade and hours, materials with quantities and unit costs, equipment rental if applicable, permits and fees passed through to the client, a clear connection to the contract or change order it covers, and retention language if the contract includes a holdback percentage. For progress billing, include the schedule of values showing work completed to date versus contract total.

What is a schedule of values in construction invoicing?

A schedule of values (SOV) breaks the total contract value into individual line items (foundation, framing, plumbing rough-in, etc.) with a dollar value for each. On each progress billing invoice, you show what percentage of each line item is complete, the dollar value of that completion, amounts billed in previous invoices, and the current amount due. The SOV prevents disputes about how much of the work has been done and how much of the contract value has been earned.

What is retention in construction invoices?

Retention (also called retainage) is a percentage of each progress payment — typically 5–10% — that the property owner or general contractor withholds until the project is substantially complete. It's a standard practice that protects owners from abandonment or defective work. As the contractor, you include the gross billing amount, subtract the retention percentage, and show the net amount currently due. Retained amounts are released at project completion, punchlist sign-off, or final lien waiver.

Do I need a lien waiver with my construction invoice?

Whether a lien waiver is required depends on your contract, the project owner, and your state. General contractors billing property owners and subcontractors billing GCs are commonly required to provide conditional lien waivers with each progress payment. A conditional waiver says you waive lien rights for amounts covered by this payment once the payment clears. An unconditional waiver is broader — avoid signing one before payment is received. Check your contract and state requirements before signing any lien document.

How to Write an Invoice for Construction Work (With Template)

A construction invoice isn’t just a bill — it’s a legal document connected to your contract, your lien rights, and the project’s payment chain. Getting it right protects your right to be paid. Getting it wrong means delays, disputes, and sometimes working without a financial safety net.

This guide covers what construction invoices need that standard invoices don’t, how progress billing and retention work, and a complete template you can adapt for residential, commercial, or subcontractor work.

How construction invoicing differs from standard freelance invoicing

Most invoice guides apply to simple, project-complete billing: work is done, here’s the invoice, pay me. Construction billing is more layered.

Progress billing: Large projects bill in phases as work is completed, not all at once at the end. Each progress invoice covers a period of work and references the overall contract.

Retention / retainage: A percentage of each payment is withheld until project completion. This appears as a line item on every progress invoice.

Materials and equipment: Unlike service-only invoices, construction invoices often include pass-through costs for materials, equipment rental, and subcontractor charges.

Lien rights: Mechanics’ liens give contractors and subcontractors legal claim against the property if unpaid. Invoices — and the lien waivers sometimes required with them — are part of this legal framework.

Multiple parties: A subcontractor bills the GC, who bills the owner. Each link in the chain has its own contract, schedule, and payment terms.

What every construction invoice needs

Standard fields (required for any invoice)

Your full business name, license number (where required), address, phone, and email
Client name and contact (owner or GC, plus billing contact)
Project name and address
Invoice number and date
Due date
Payment terms

Construction-specific fields

Contract reference: Every invoice should reference the contract it covers. “This invoice is submitted pursuant to Contract #[XX] dated [date].” For change orders, reference the specific change order number.

Invoice period: The dates of work covered by this invoice — e.g., “Work completed April 1–30, 2026.”

Labor breakdown: List labor by trade, hours worked, and rate. Don’t lump it all into “labor — $12,000.” Break it down.

Trade	Hours	Rate	Total
Foreman	80	$95/hr	$7,600
Carpenter	120	$75/hr	$9,000
Laborer	60	$55/hr	$3,300

Materials: List each material category with quantities and unit cost. For large material lists, attach a materials schedule and reference it on the invoice.

Materials	Qty	Unit Cost	Total
Framing lumber (2×6, 16’)	400 board ft	$1.20	$480
OSB sheathing (7/16”, 4×8)	80 sheets	$28.50	$2,280
Concrete, 3000 PSI	12 CY	$145	$1,740

Equipment rental: If you’re passing equipment costs to the client, list each piece, the rental period, and the cost.

Subcontractor costs: If you’re a GC billing an owner for subcontractor work, list each sub’s charges as a line item or attach their invoices.

Permits and fees: Pass-through costs for permits, inspections, and fees billed at cost (or cost plus your markup, per the contract).

Overhead and profit (markup): If your contract includes a percentage for overhead and profit on cost-plus work, show it as a line item on the total of materials and subs.

Progress billing and the schedule of values

For projects over a few months, you’ll bill in stages. The Schedule of Values (SOV) is the backbone of progress billing.

What the SOV does:

Breaks the contract sum into individual line items
Assigns a dollar value to each line item
Tracks what percentage of each item is complete on each billing cycle
Shows cumulative billing to date and the current period’s claim

Example Schedule of Values (partial):

Work Item	Contract Value	% Complete	Earned to Date	Prev Billed	Current Period
Site preparation	$8,500	100%	$8,500	$8,500	$0
Foundation	$22,000	100%	$22,000	$22,000	$0
Framing	$38,000	75%	$28,500	$14,250	$14,250
Rough electrical	$15,000	30%	$4,500	$0	$4,500
Total	$83,500		$63,500	$44,750	$18,750

This format — often based on AIA Application for Payment forms G702 and G703 — is the standard for commercial construction. Some GCs and owners require it verbatim. Others accept your own format as long as the same information is present.

If a GC or owner hands you an AIA G702/G703 form and tells you to use it, use it. Submitting invoices in the wrong format is one of the most common reasons subcontractor payments are delayed. The paperwork exists for a reason — it protects everyone in the payment chain.

Retention: how to show it on the invoice

Retention is withheld from each progress payment and held until project completion (or per the contract’s retention release schedule).

How it appears on the invoice:


Gross amount earned this period	$18,750
Less retention (10%)	−$1,875
Net amount due this period	$16,875
Previously billed (net of retention)	$40,275
Retention held to date	$4,275

Show both the gross amount and the net after retention. Show how much retention has accumulated. This gives the owner and GC a clear picture of where they stand in the payment chain.

Retention release: When the project reaches substantial completion, you submit a final invoice or a separate retention release invoice for all withheld amounts. Most contracts require a final lien waiver for the retained amount.

Lien waivers

A lien waiver is a document you sign that waives your right to file a mechanics’ lien for the amounts covered by a payment. Many GCs and property owners require one with each progress payment before releasing funds.

Two types:

Conditional lien waiver: “I waive lien rights for amounts covered by this payment, effective when payment clears.” Sign this before payment is received — you’re only waiving rights once the money actually arrives. This is the standard safe option.

Unconditional lien waiver: “I waive lien rights for these amounts, period.” Don’t sign this until the payment has actually cleared your bank account. Signing it beforehand gives up your lien rights without the protection of confirmed payment.

Your state may have specific required language for lien waivers. California, Texas, Florida, and several other states have statutory forms. Use the correct form for your state — a waiver that doesn’t match state requirements may not be enforceable.

Complete construction invoice template

[YOUR COMPANY NAME] Contractor License #[XXXXX] [Address] | [Phone] | [Email]

PROGRESS PAYMENT APPLICATION / INVOICE

Invoice #: [XXXX] Invoice Date: [Date] Invoice Period: [Start Date] – [End Date] Due Date: [Date]

Owner / General Contractor: [Name / Company] [Address] [Contact Name and Email]

Project: [Project Name] Project Address: [Full address] Contract #: [Reference number] | Contract Date: [Date] Change Order(s) Included: [CO# if applicable]

LABOR

Description	Trade	Hours	Rate	Total
[Description]	[Trade]	[X]	$[Rate]	$[Total]
[Description]	[Trade]	[X]	$[Rate]	$[Total]
			Labor Subtotal	$[X]

MATERIALS

Description	Qty	Unit	Unit Cost	Total
[Description]	[X]	[unit]	$[Rate]	$[Total]
[Description]	[X]	[unit]	$[Rate]	$[Total]
			Materials Subtotal	$[X]

EQUIPMENT RENTAL

Equipment	Period	Cost
[Description]	[Dates]	$[X]
	Equipment Subtotal	$[X]

PERMITS / FEES $[X]

SUBCONTRACTORS $[X] (attach sub invoices)

Gross Amount This Period: $[X] Less Retention ([X]%): −$[X] Net Amount Due This Period: $[X]

Previously Billed (net): $[X] Total Billed to Date (net): $[X] Retention Held to Date: $[X] Original Contract Value: $[X] Remaining to Bill: $[X]

Payment Terms: Net [15/30] from receipt of approved application Payment Method: [Wire transfer / ACH / Check payable to: [Company Name]]

Late Payment: Interest of [1.5%] per month on unpaid balances after [30] days.

Lien Waiver: [ ] Conditional lien waiver attached for amounts covered by this payment.

Contractor certification: The undersigned certifies that the work described above has been completed in accordance with the contract documents.

Signature: ___________________ Date: ___________ [Your Name / Title]

Common mistakes in construction invoicing

Not referencing the contract. Every invoice should trace back to a contract or change order. An invoice with no contract reference can be disputed on the grounds that the work wasn’t authorized.

Billing unapproved change orders. If extra work wasn’t covered by a signed change order, don’t invoice for it yet. Get the CO signed first, then bill it on the next invoice cycle.

Overbilling on the schedule of values. Billing a line item at 100% before it’s actually 100% complete is called front-loading. It’s common, it’s tempting, and it creates serious disputes (and sometimes legal exposure) when the GC or owner catches it.

Ignoring retention in the math. If you ignore retention until the final invoice, you’ll have a mismatch between what you’ve been paid and what the contract shows as earned.

Missing or wrong lien waiver form. Many GCs won’t release payment for a lien waiver on the wrong form. Keep state-specific waiver forms in your template folder.