Labour and Material Payment Bonds

Get The Labour & Material Payment Bond You Need Today.

FCA is Canada’s Labour & Material Payment Bond Expert Since 1919.

What is a Labour and Material Payment Bond?

A Labour and Material Payment bond guarantees that the bonded contractor will pay all claimants for goods and/or services supplied for the bonded project. A claimant under a labour and material payment bond is a trade contractor or supplier who has a direct contract with the bonded contractor to supply goods or services to the bonded job. Lower tier subs or suppliers are not protected under the standard labour and material payment bond.

It is important to note that a payment bond is a companion document to the performance bond, and the two should be executed together. Bonding companies typically will NOT issue a payment bond as a “stand-alone” obligation.

Like performance bonds, owners typically ask for 50% of the contract amount, but labour and material payment bonds can also be in the amount of 100%. The surety can never be liable for more than the total amount of the bond.

The Three C’s of Credit

Labour & Material Bond rates vary in cost depend on this 3’C:


Does the contractor have the necessary skills, knowledge, manpower, and ability to complete the project?


What are the contractor’s standing and reputation in the market?


How strong is the company financially?

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Frequently Asked Questions

When is labour and material payment bond required?

When a contractor is a successful bidder on a tender, a labour and material payment bond is often required to be submitted along with various documents prior to starting work.
Labour and material payment bonds are most often requested on public projects but can be requested by private owners as well.

How much does a labour & material payment bond cost?

Generally speaking, rates are usually between 03.% to 5% of the contract value.
Labour and Material bond rates vary in costs depending on the 3 C’s of credit.

Are you new and emerging contractors?

  • Do you need a bid, performance or labour & material payment bond under 1 Million dollars?
  • Are you a new contractor looking to begin bidding on public contracts?
  • Have you been told your company does not qualify for bonding?

If you answered yes to any of these questions, then FirstBond™ is perfect for you.
FirstBond is a new program by FCA Surety, it is a quick easy bonding solution for new and emerging contractors across Canada.