Last edited 02 Oct 2020

Main contractor’s discount

The term 'main contractor’s discount' (MCD) refers to a clause that can be included in building subcontracts to encourage main contractors to pay their subcontractors within the period of time specified in the contract.

A discount (typically, 2.5%) is deducted if the main contractor pays promptly, with the subcontractor able to recover the discount by adding an amount to the contract sum. The discount is applied to the value of works undertaken by the subcontractor and deducted from any application for payment. The discount should be clearly stated on invoices, applications and accounts.

MCD clauses were, until relatively recently, a feature of some standard forms of contract, but they have now generally been removed. They still however appear in some bespoke contracts, where they are not always related to prompt payment, but rather are seen as a management fee.

[edit] Related articles on Designing Buildings Wiki


Designing Buildings Anywhere

Get the Firefox add-on to access 20,000 definitions direct from any website

Find out more Accept cookies and
don't show me this again