Budgeting for a New Mexico contractor license means adding up exam fees, Division fees, the bond, and insurance. Here is every cost figure the primary sources confirm, and what to watch for on the figures they do not.
This is an independent guide, not affiliated with the New Mexico Construction Industries Division, the Regulation and Licensing Department, PSI, or NASCLA. Licensing details change, so verify current requirements against the official publications before you act.
Exam fees
- Business and Law exam: $68.88, paid to PSI. Passing scores are valid 1 year; the fee is valid 1 year from the date PSI receives it. Cancel at least 2 days before the appointment or forfeit the fee.
- Trade exam: a separate PSI fee applies for your classification's trade exam. Confirm the current amount in the PSI bulletin.
If you fail and retest, you pay the exam fee again. You may not take the same exam more than twice within a 30-day period.
Division fees
Per the current PSI packet and Division rules:
- Application fee: $36 (non-refundable). The rule text lists $30, but the current PSI packet says $36; the packet is the number you will actually pay.
- Classification fees: $300 per classification for the major 98 classifications (GB-98, GA-98, GF-98, EE-98, MM-98), $150 per classification for all other single classifications, capped at $300 per category.
- QP certificate of qualification: $6 per certificate.
The $10,000 bond
The license requires a $10,000 proof-of-responsibility bond underwritten by a corporate surety authorized in New Mexico. What you pay is the bond premium, not $10,000; the premium is a small fraction of the bond amount and depends on your credit and the surety. Shop sureties. The bond must be in place for issuance and renewal, must cover the entire 3-year license period, and if it lapses without replacement before the 40th day, the license is subject to revocation.
Insurance
Workers' comp is mandatory for every contractor regardless of employee count. The premium depends on your payroll and classification codes; get quotes early because this is often the largest recurring cost. The workers' comp administration fee is $2.55 employer share plus $2.25 employee share per covered employee per quarter. General liability insurance is not set at a state-mandated minimum in the licensing act the way some states do it, but owners and general contractors will require it, and public work requires the Little Miller bonds. Budget for it.
Penalties that cost money
Some figures worth knowing as costs of getting it wrong:
- Missing license number on written bids or permit applications: $150 penalty.
- Failing to give residential owners the required written disclosure: $500 to $1,500.
- Late license renewal: $1.00 per day for the first 30 days, then twice the renewal fee. Miss the 3-month window and the license is canceled, which means starting over.
- Unlicensed contracting (criminal): work value of $5,000 or less means 90 days in county jail and/or a $300 to $500 fine; over $5,000 means 6 months and/or 10% of the work value. A repeat conviction doubles the penalty.
- Administrative penalties: $300 to $500 for work value of $5,000 or less; over $5,000, up to 10% of the contract amount (not less than $500); prior discipline doubles it; failure to pay adds $100 per day.
The course alternative
If you take the approved business-and-law course instead of the PSI exam, you trade the $68.88 exam fee for the course tuition, which varies by provider. We compare both paths.
Putting it together
A realistic first-year budget: the $68.88 exam fee (times two if you take a trade exam), the $36 application fee, $300 for a major classification, $6 for the QP certificate, the bond premium, workers' comp premiums, and any prep materials. The Division fees are the smallest part. The bond premium and insurance are where the real money goes. The step-by-step licensing path and realistic timelines complete the picture.
Try the free practice quiz
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