Payment Profile

The term ‘payment profile’ describes the timing and scaling of a contractor’s remuneration. For example, some contracts include a retention clause, under which the client retains a sum of money until a defined period has elapsed. In other contracts, the client may make interim payments to the contractor to cover out-of-pocket expenses such as the purchase of materials, based on a claim by the contractor for the value of those expenses. Alternatively, the client may define key milestones that trigger the release of a payment on completion by the contractor. Such stage or milestone payments represent a payment profile, and this profile is used where it is not possible or appropriate to create a simple lump sum payment upon completion of the work. See also Incentive.