Federal vs. State: How Payment Bond Requirements Work
A payment bond guarantees that a contractor will pay subcontractors, laborers, and material suppliers on a construction project. On public (government-owned) projects, it's especially important because those parties can't file a mechanic's lien against government property — the payment bond is their financial protection instead.
Whether a payment bond is required, and at what threshold, depends on who owns the project:
- Federal projects — the Miller Act. Under 40 U.S.C. §§ 3131–3134, payment bonds are required on federal construction contracts exceeding $150,000, issued together with a performance bond (each typically 100% of the contract price).
- State & local projects — "Little Miller Acts." Every state has its own version, but the dollar threshold, bond amount, and rules vary widely. That's what the table below covers.
- Private projects. Payment bonds are not legally required, but many private owners and lenders require them by contract.
Payment Bond Threshold by State
The Threshold column shows the contract dollar amount above which a payment bond is generally required on public projects. The Bond Amount column notes the required bond size (most states are 100% of the contract, but several are lower). Click any statute to read the official state law. States we have a dedicated guide for are linked in the first column.
| State | Payment Bond Threshold | Bond Amount | Statute (Official Source) | Notes |
|---|---|---|---|---|
| Alabama | Over $100,000 | Perf 100% / Pay ≥50% | Ala. Code § 39-1-1 | 45-day notice; suit within 1 year. (The $50K figure on some sites is wrong.) Verified |
| Alaska | Over $100,000 | Sliding scale | AS 36.25.010 | Municipality may exempt up to $400,000 by ordinance. Verified |
| Arizona | All public contracts | 100% | A.R.S. § 34-222 | No dollar floor in statute; bonds on full contract. Suit within 1 year. Verified |
| Arkansas | Over $50,000 | 100% of contract | Ark. Code § 22-9-401 et seq. | Combined statutory bond. Confirm exact bond-trigger language with the state. Confirm locally |
| California | Over $25,000 (payment bond) | 100% | Cal. Civ. Code § 9550 | Performance bond thresholds set separately by awarding entity. Verified |
| Colorado | Over $50,000 (local) | ≥50% pay / commonly 100% perf | C.R.S. § 38-26-105 | State projects use a higher (~$150K) threshold under the procurement code. Confirm locally |
| Connecticut | Over $100,000 | 100% | Conn. Gen. Stat. § 49-41 | No bond if estimated labor+materials under $100,000. Verified |
| Delaware | Large public works (~$100,000+) | 100% | 29 Del. C. § 6962 | Exact dollar line set administratively by the CPAC; confirm current figure. Confirm locally |
| Florida | $200,000+ mandatory | 100% | Fla. Stat. § 255.05 | Tiered: no bond ≤$100K; $100K–$200K discretionary; $200K+ mandatory. Verified |
| Georgia | Over $250,000 | 100% | O.C.G.A. § 13-10-60 | Raised from $100K to $250K by HB 137, effective July 1, 2025. Verified |
| Hawaii | Over $25,000 | 100% | HRS § 103D-324 | 90-day notice; suit within 1 year. Verified |
| Idaho | $50,000 or more | ≥85% (not 100%) | Idaho Code § 54-1926 | Bond amount is at least 85% of contract, not 100%. Verified |
| Illinois | Over $150,000 | 100% | 30 ILCS 550/1 | $150K through Jan 1, 2029, then reverts to $50K. IDOT/Tollway use $500K. Verified |
| Indiana | More than $200,000 | 100% | IC 36-1-12-13.1 | Same $200K trigger for state and local tracks. Verified |
| Iowa | $25,000 or more | Combined bond | Iowa Code § 573.2 | Single bond secures both performance and payment. Verified |
| Kansas | Over $100,000 | 100% | K.S.A. § 60-1111 | Statutory payment bond not less than the total contract amount. Verified |
| Kentucky | Over $40,000 (state) / $100,000 (local) | 100% | KRS § 45A.435 | Two-tier. The $25K figure on some sites is not supported by statute. Verified |
| Louisiana | Over $25,000 | ≥50% (not 100%) | La. R.S. § 38:2241 | Payment security is at least 50% of contract. 45-day claim recordation. Verified |
| Maine | Over $125,000 | 100% | 14 M.R.S. § 871 | Same threshold for performance and payment bonds. Verified |
| Maryland | Over $100,000 | Payment ≥50% | Md. State Fin. & Proc. § 17-103 | Payment security ≥50%. Non-State bodies may require security $50K–$100K. Verified |
| Massachusetts | More than $25,000 | Payment ≥50% | M.G.L. c. 149, § 29 | Payment bond ≥50%. 65-day notice for non-privity claimants. Verified |
| Michigan | More than $50,000 | Payment ≥25% | MCL 129.201 et seq. | Same threshold both bonds; payment bond at least 25% of contract. Verified |
| Minnesota | More than $175,000 | 100%+ | Minn. Stat. § 574.26 | Threshold cross-references § 471.345 (currently $175K); can move. Verified |
| Mississippi | In excess of $25,000 | 100% | Miss. Code § 31-5-51 | Under $25K, public body may elect lump-sum payment in lieu of bonds. Verified |
| Missouri | Over $50,000 | 100% | RSMo § 107.170 | Raised from $25K to $50K effective Aug 28, 2025 (SB 167). Verified |
| Montana | Waivable under $150,000 | 100% state / ≥25% municipal | Mont. Code § 18-2-201 | Bonds are default; entity may waive under $150K ($7.5K schools). Verified |
| Nebraska | Over $15,000 (state) / $10,000 (local) | 100% | Neb. Rev. Stat. § 52-118 | Two-tier by contracting entity. Verified |
| Nevada | Exceeding $100,000 | Perf ≥50% / Pay ≥50% | NRS 339.025 | Each bond not less than 50% of contract, set by contracting body. Verified |
| New Hampshire | $75,000 (state) / $125,000 (municipal) | 100% | RSA 447:16 | Two-tier. The $35K figure on older sites is outdated. Verified |
| New Jersey | Exceeding $200,000 | 100% | N.J.S.A. 2A:44-143 | Raised from $100K to $200K. State contracts may waive at/below $200K. Confirm locally |
| New Mexico | Over $25,000 | 100% | N.M. Stat. § 13-4-18 | Under $25K, agency may require bonds at discretion. Verified |
| New York | Discretionary under $100,000 | 100% | N.Y. State Fin. Law § 137 | Bond may be dispensed under $100K (or $200K non-multiple-award). Verified |
| North Carolina | Over $300,000 (local) / $500,000 (state) | 100% | N.C. Gen. Stat. § 44A-26 | Individual contract must also exceed $50K. 120-day notice. Verified |
| North Dakota | Over $200,000 | 100%+ | N.D. Cent. Code § 48-01.2-10 | Single statutory bond. The $100K figure on some sites is wrong. Verified |
| Ohio | All bid public improvements | 100% | Ohio Rev. Code § 153.54 | No bond-specific dollar floor; 100% bond on bid public improvements. Confirm locally |
| Oklahoma | Over $100,000 | 100% | Okla. Stat. tit. 61, § 1 | Raised from $50K to $100K effective Nov 1, 2022. 1-yr maintenance bond. Verified |
| Oregon | Over $100,000 ($50,000 transportation) | 100% | O.R.S. § 279C.380 | Lower $50K threshold for highways/bridges/transportation. Verified |
| Pennsylvania | Over $5,000 (local) / $100,000 (Commonwealth) | 100% | 8 P.S. § 193 (local); 62 Pa.C.S. § 903 (state) | Depends on owner type. The $10K figure widely cited is an error. Confirm locally |
| Rhode Island | In excess of $50,000 | 100% | R.I. Gen. Laws § 37-12-1 | A $150K carve-out may apply to some road/bridge contracts; confirm. Confirm locally |
| South Carolina | Over $50,000 | 100% | S.C. Code § 11-35-3030 | Waivable for contracts ≤$50K. 90-day notice; suit within 1 year. Verified |
| South Dakota | Over $50,000 | 100% | SDCL Ch. 5-21 (§ 5-21-1.1) | Bond waived when contract does not exceed $50K. Verified |
| Tennessee | Over $100,000 | ≥25% (100% common) | Tenn. Code § 12-4-201 | The $25K figure on aggregator tables is wrong. Verified |
| Texas | Over $25,000 ($50,000 municipal) | 100% | Tex. Gov't Code § 2253.021 | Performance bond required separately over $100,000. Verified |
| Utah | All bid public contracts | 100% | Utah Code § 63G-6a-1103 | No statutory dollar floor; small purchases exempt. The $50K figure is a procurement concept, not a bond threshold. Verified |
| Vermont | Highway/state projects (~$100,000) | 100% | 19 V.S.A. § 10 | Little Miller Act is transportation-focused; no clean statewide payment-bond trigger. Verify with VT counsel. Consult counsel |
| Virginia | Over $500,000 (nontransportation) | 100% | Va. Code § 2.2-4337 | $100K–$500K: bond waived but prequalification applies. VDOT differs. Verified |
| Washington | ≤$150,000 may use 10% retainage in lieu | 100% | RCW 39.08.010 | Bond effectively required; small contracts may substitute retainage. Confirm locally |
| West Virginia | Over $25,000 (competitive-bid trigger) | 100% | W. Va. Code § 5-22-1 | Bond ties to $25K bid trigger. A 2025 bill may raise it to $50K; confirm. Confirm locally |
| Wisconsin | ~$148,000 state / ~$74,000 local (indexed) | 100% | Wis. Stat. § 779.14 | Inflation-indexed; exact figures drift. Cite as approximate. Confirm locally |
| Wyoming | Over $150,000 | 100% | Wyo. Stat. § 16-6-112 | Raised from $50K to $150K (2020). The $7,500 figure is badly outdated. Verified |
| Washington, D.C. | Over $25,000 | Tiered (½ up to $1M) | D.C. Code § 2-201.01 | Little Miller Act triggers at $25K (distinct from the $100K procurement waiver). Confirm locally |
Legend: Verified confirmed against primary statute Confirm locally nuance/administrative figure — check current value Consult counsel narrow or ambiguous statute.
What the Table Shows (Beyond the Numbers)
A few patterns are worth understanding before you rely on a single threshold:
- The bond amount isn't always 100%. Most states require a payment bond equal to 100% of the contract, but some don't — Idaho is at least 85%, and Louisiana, Maryland, and Massachusetts set the payment bond around 50%.
- Several states use two-tier thresholds. Kentucky ($40K state / $100K local), Nebraska ($15K state / $10K local), New Hampshire ($75K state / $125K municipal), North Carolina ($300K local / $500K state), and Pennsylvania ($5K local / $100K Commonwealth) all differ by who owns the project.
- Some states have no dollar floor. Arizona, Ohio, and Utah effectively require bonds on public construction contracts regardless of a specific dollar amount (subject to the bidding process or small-purchase rules).
- Thresholds change. Georgia rose to $250K (July 2025), Missouri to $50K (August 2025), Oklahoma to $100K (2022), and Wyoming to $150K (2020). Illinois's $150K reverts to $50K in 2029. Always confirm the current figure.
- Transportation projects often differ. Several states (Oregon, Virginia, Vermont) apply different thresholds to highway/transportation work than to buildings.
Need a Payment Bond? We Cover All 50 States
Whatever your state's threshold, we can get you the payment bond your project requires — usually issued together with a performance bond as a package. With access to 80+ A-rated sureties, we place bonds nationwide, from fast credit-based programs to full standard underwriting.
Or call 877-914-0909 to speak with a specialist.
Frequently Asked Questions
No. On federal projects, the Miller Act requires payment bonds on construction contracts exceeding $150,000. On state and local projects, each state has its own "Little Miller Act," and the threshold varies widely — from no minimum (bonds on all public contracts) in states like Arizona to $500,000 in Virginia. Several states use two-tier thresholds (state vs. local) or waiver structures, and a few require payment bonds at less than 100% of the contract price.
Under the Miller Act (40 U.S.C. §§ 3131–3134), payment bonds are required on federal construction contracts exceeding $150,000, alongside a performance bond. Both are typically 100% of the contract price. The payment bond protects subcontractors, laborers, and suppliers who can't file mechanic's liens against government property.
Not always. Most states require a payment bond equal to 100% of the contract price, but some do not — for example, Idaho requires at least 85%, and Louisiana, Maryland, and Massachusetts set the payment bond at approximately 50% of the contract amount. Always confirm the required amount for your specific state and project.
The bid documents or contract will state whether a payment bond is required and in what amount — that controls. As a general rule, most public construction projects above the applicable state or federal threshold require a payment bond, usually issued together with a performance bond. Private projects aren't legally required to have them, but many owners and lenders require them by contract. When in doubt, check the contract specifications or contact us.