What does a construction equipment rental guarantee protect?
Unpaid rental earnings can leave a small excavator, dump-truck or crane business struggling to pay for fuel, operators and equipment finance.
This calculator is based on Korean rules for 2026 and helps you organize the figures and documents before contracting or when preparing a claim.
A required guarantee amount and an issued guarantee’s remaining coverage can be different, so they are shown separately.
Who can use it
The intended users are individual equipment rental providers and small machinery businesses.
Operator licences, inspection deadlines and construction subcontract payment guarantees concern different obligations and are handled by separate tools.
A practical decision
Identify the actual guarantee arrangement, request the appropriate certificate and check whether the rental contract was submitted to the site issuer.
When arrears exist, take the review and work records to the issuer to discuss an actual claim.
Site-wide guarantees are the default; individual guarantees are an option
Article 68-3(1) of the Framework Act on the Construction Industry requires the contractor or subcontractor to submit a site-wide machinery rental payment guarantee to the project owner before construction starts.
The rental provider submits its rental contract to that guarantee’s issuer.
A qualifying small project may use individual-contract guarantees instead, but qualification alone does not eliminate the guarantee requirement.
Check the actual arrangement
Use the site notice, KISCON and the issuer to check issuance and the guarantee period.
Choose the arrangement actually confirmed; use unconfirmed when the documents are still missing.
Scope and older contracts
Do not assume every equipment lease falls within this Act.
Unconfirmed or outside-scope contracts do not receive a statutory classification, and contracts before 2019-06-19 require the earlier rules and transitional provisions.
Which documents supply the inputs?
Enter the relevant prime-contract or subcontract amount and the project term from commencement to scheduled completion in months.
The rental total in the project’s cost schedule differs from your own rental amount; leave it blank if unknown.
Entering zero for an unknown total can incorrectly trigger the small-project exception.
Your rental contract
Include split rental contracts with the same provider when entering the rental amount.
Enter the contractual advance, full rental term and current unpaid balance after advance payment.
If the rental term exceeds the project term, recheck amendments and the project and guarantee periods.
Your current limit
Ask the issuer for the remaining personal limit applicable to these arrears rather than simply copying the original face amount.
Earlier guarantee payments, other covered debts and debts outside the guarantee period may change the amount that remains available.
The individual-contract formula and whole-KRW rounding
Article 34-4(4)(2) of the Enforcement Rule distinguishes terms of four months or less from longer terms.
Let A be the rental amount, S the contractual advance and M the rental term in months.
Exactly four months uses the full amount after advance; even a slightly longer term uses four average months.
Four months or less
G = A − S.
A rental of KRW 20,000,000 with a KRW 4,000,000 advance therefore requires KRW 16,000,000.
If the full rental amount was advanced, the remaining amount and formula requirement are zero.
More than four months
G = (A − S) ÷ M × 4.
Official formula image flSeq42771709 confirms that the entire rental-minus-advance amount is divided by the term.
Fractions of KRW are rounded upward to avoid a modeled shortfall; this is an application convention, not a claim about a statutory issuer rounding rule.
Separate the legal requirement from current unguaranteed exposure
A calculated requirement of KRW 32,000,000 does not protect you if no guarantee was issued.
No certificate produces a confirmed current limit of zero; unconfirmed issuance leaves both the limit and exposure pending.
Even with issuance, the guarantee period, covered debt and personal remaining limit must be confirmed.
Current arrears
For unpaid amount U and confirmed current personal limit C, estimated exposure is max(0, U − C).
The individual-contract requirement shortfall and exposure assuming full statutory issuance are separate reference figures, not substitutes for the actual certificate.
The site total is not personal coverage
A site-wide amount may relate to multiple rental providers and is not an exclusive limit for your debt.
If only the site total is known, or the issuer has not confirmed your creditor status, personal exposure remains pending.
Issuer terms, allocation among claimants and payment liability are not decided here.
The 15-day site submission and creditor-confirmation notice
Article 34-4(5) requires the rental contract to be submitted to the site-wide issuer within 15 days from contracting and requires the issuer to notify the provider of confirmed creditor status.
Submitting the contract and receiving the issuer’s confirmation are separate evidence checks.
Sending a document alone does not establish coverage for every unpaid debt.
Date examples
A contract dated 2026-10-01 has an unadjusted contract-date-plus-15-day reference of 2026-10-16, excluding the starting day.
For 2026-11-02 the reference is 2026-11-17.
The tool shows the date before holiday adjustment and the day difference; verify actual receipt rules and deadlines with the issuer.
After the reference date
If submission was late or has not happened, promptly check receipt and the creditor-confirmation notice.
Passing the displayed 15-day reference does not automatically establish extinguishment or a complete bar to claims.
Ask the issuer about late acceptance and coverage of the particular arrears.
How to use the calculator
Start with statutory coverage, the actual arrangement and the project facts.
Then enter your rental contract, unpaid amount and issuer-confirmed personal remaining limit.
For site-wide coverage, check submission and the creditor notice, then resolve the items marked for review.
Collect the evidence
Prepare the rental contract and amendments, certificate and terms, cost schedule, work logs and earnings confirmations.
Reconcile invoices with actual payment records so amounts already received are not counted as unpaid.
Keep a review record
Save the review TXT or print it to keep the current inputs and outputs.
The TXT is a consultation aid, not a formal guarantee claim form, and the issuer’s required evidence must still be supplied.
The scenario holds the entered contract amount and term constant.
Worked individual-contract examples
For an illustrative rental amount of KRW 80,000,000, no advance and a ten-month term, four average months of KRW 8,000,000 equal a KRW 32,000,000 requirement.
Arrears of KRW 48,000,000 against a confirmed limit of KRW 32,000,000 leave KRW 16,000,000 of estimated exposure.
First verify that the actual project qualifies for individual guarantees and that the arrangement and limit are applicable.
The default fictional case
A prime contract of KRW 90,000,000 lasting five months meets the small-project individual-guarantee exception.
A KRW 40,000,000 rental over five months with no advance requires KRW 32,000,000.
KRW 40,000,000 of arrears against a confirmed KRW 32,000,000 limit leaves KRW 8,000,000 exposed.
The same case without issuance
Selecting no certificate gives a current limit of zero and exposure equal to the whole KRW 40,000,000 unpaid amount.
That differs from the KRW 8,000,000 reference assuming full statutory issuance.
Unknown issuance remains pending rather than being silently treated as zero or full coverage.
Four months does not establish an automatic right to stop work
The scenario table assumes equal monthly earnings after the advance and shows one to six assumed months of arrears.
Accumulation is capped at the remaining rental amount and fractions are rounded upward.
Actual work days, earnings approval and payment due dates can produce a different arrears pattern.
Preparing a claim
Four average months or more of arrears on a long contract is a reason to promptly check remaining coverage.
It does not mean the first four months are automatically safe or that stopping work is automatically authorized.
Discuss claim timing and any contractual responsibility for continuing or stopping work.
Model boundaries
Do not mix unverified late interest, damages or litigation costs into the rental arrears input.
The tool does not predict success in payment-order proceedings or litigation, recovery rates or recovery time.
Use the existing payment-order cost calculator when you need that separate budget.
Guarantee non-submission and missing contracts are separate issues
Construction Industry Act Enforcement Decree Annex 6 specifies a basic two-month business suspension or KRW 40 million surcharge for unjustified failure to submit the required guarantee.
This is a contractor sanction, not compensation paid to the rental provider.
The competent authority assesses the actual facts, history and any correction when deciding the disposition.
Written contract duty
Article 22 of the Construction Machinery Management Act requires a written rental contract, specification of rent and term, and exchange and retention of signed and sealed copies.
Enforcement Decree Annex 3, item 2(dheo), lists basic missing-contract fines of KRW 2,000,000 / 2,500,000 / 3,000,000 by violation tier.
Discretionary reductions and increases are separate and these fines are not added to arrears exposure.
What to do on site
Request certificate verification from the contractor and take supporting records to the competent authority if needed.
Public owners also have the submission or delivery verification duty under Article 68-3(6).
Keep administrative enquiries separate from the issuer’s guarantee claim process.
Individual-guarantee and exemption thresholds
Distinguish strictly below from at or below.
Apart from direct-payment agreement, the small-contract exemption also depends on eligibility and the actual arrangement.
Individual-guarantee options and exemption conditions under the 2026 Enforcement Rule Article 34-4| Condition | Amount threshold | Additional check |
|---|
| Prime-contract option | Below KRW 100,000,000 | Project term at most 5 months |
| Subcontract option | Below KRW 50,000,000 | Project term at most 3 months |
| Cost-schedule total | Below KRW 4,000,000 | Entire scheduled project rental total |
| Small individual contract | At most KRW 2,000,000 | Individual eligibility; aggregate split contracts |
| Direct-payment agreement | No amount threshold | All three parties agree intention, method and procedure |
Frequently asked questions
Is every KRW 2 million contract exempt?
No.
The project must qualify for individual guarantees and actually use that arrangement, with the same provider’s split contracts aggregated to KRW 2,000,000 or less.
A site-wide arrangement does not automatically receive the small-contract exemption.
Does exactly KRW 4 million qualify under the cost-schedule test?
No; the rental total must be strictly below KRW 4,000,000.
At exactly that amount, inspect the other exception conditions separately.
Can I use the entire site guarantee as my limit?
Only if the issuer has actually confirmed that amount as your applicable personal remaining limit.
Separate the site total, personal coverage and creditor-confirmation notice.
Does missing 15 days automatically eliminate coverage?
This tool does not decide that a claim is barred.
Check the unadjusted reference, actual receipt rules, late acceptance, creditor confirmation and coverage of the debt with the issuer.
Is a promise to pay directly enough?
Confirm agreement by the owner, contractor and provider on the intention, method and procedure for direct payment.
A unilateral promise or two-party discussion must not be entered as a confirmed three-party agreement.
Is the issuance fee the same as the guarantee amount?
No.
The issuance fee is a cost or settlement item, whereas the guaranteed amount secures rental payment.
This tool does not estimate issuer fees or machinery-input ratios from administrative notices.
How does an advance affect the formula?
Subtract the contractual rental advance from the total rental amount first.
For a term longer than four months, divide that difference by the term and multiply by four.
Arrears must also remain within the balance after advance.
Will submitting the TXT produce payment?
The TXT is a consultation review record.
The issuer assesses the certificate, terms, creditor status, period and work and non-payment evidence; the displayed amount is not a confirmed payout.
Official evidence and updates
Korea-based 2026 rules, checked 2026-11-02 using the official MOLEG OPEN API.
The current versions were the Construction Industry Act MST273435 (effective 2025-11-27), its Rule MST282375 (2026-01-02), its Decree MST287349 (2026-06-23), the Machinery Act MST283763 (2026-08-28) and its Decree MST284659 (2026-03-24).
The individual formula image and current Annex 6 and Annex 3 were checked directly.
Recheck later amendments, issuer terms, personal remaining coverage, allocation and actual submission deadlines when using the results.
Reconcile your certificate and arrears
When a result needs review, ask the issuer for the missing confirmation instead of inventing a figure.
Save the review again once coverage and submission evidence are confirmed, then use it to explain the differences between your contract, arrears and guarantee.
Secure the documents and decide the next action to address growing unpaid earnings.