diff --git a/test/foundry/unit/concrete/TestSponsorshipPaymasterWithPremiumTest.t.sol b/test/foundry/unit/concrete/TestSponsorshipPaymasterWithPremiumTest.t.sol
new file mode 100644
index 0000000..28716cf
--- /dev/null
+++ b/test/foundry/unit/concrete/TestSponsorshipPaymasterWithPremiumTest.t.sol
@@ -0,0 +1,297 @@
+// SPDX-License-Identifier: Unlicensed
+pragma solidity ^0.8.26;
+
+import { console2 } from "forge-std/src/Console2.sol";
+import { NexusTestBase } from "../../base/NexusTestBase.sol";
+import { IBiconomySponsorshipPaymaster } from "../../../../contracts/interfaces/IBiconomySponsorshipPaymaster.sol";
+import { BiconomySponsorshipPaymaster } from "../../../../contracts/sponsorship/SponsorshipPaymasterWithPremium.sol";
+import "account-abstraction/contracts/core/UserOperationLib.sol";
+
+contract TestSponsorshipPaymasterWithPremium is NexusTestBase {
+    BiconomySponsorshipPaymaster public bicoPaymaster;
+
+    function setUp() public {
+        setupTestEnvironment();
+        // Deploy Sponsorship Paymaster
+        bicoPaymaster = new BiconomySponsorshipPaymaster(
+            PAYMASTER_OWNER.addr, ENTRYPOINT, PAYMASTER_SIGNER.addr, PAYMASTER_FEE_COLLECTOR.addr
+        );
+    }
+
+    function test_Deploy() external {
+        BiconomySponsorshipPaymaster testArtifact = new BiconomySponsorshipPaymaster(
+            PAYMASTER_OWNER.addr, ENTRYPOINT, PAYMASTER_SIGNER.addr, PAYMASTER_FEE_COLLECTOR.addr
+        );
+        assertEq(testArtifact.owner(), PAYMASTER_OWNER.addr);
+        assertEq(address(testArtifact.entryPoint()), ENTRYPOINT_ADDRESS);
+        assertEq(testArtifact.verifyingSigner(), PAYMASTER_SIGNER.addr);
+        assertEq(testArtifact.feeCollector(), PAYMASTER_FEE_COLLECTOR.addr);
+    }
+
+    function test_CheckInitialPaymasterState() external {
+        assertEq(bicoPaymaster.owner(), PAYMASTER_OWNER.addr);
+        assertEq(address(bicoPaymaster.entryPoint()), ENTRYPOINT_ADDRESS);
+        assertEq(bicoPaymaster.verifyingSigner(), PAYMASTER_SIGNER.addr);
+        assertEq(bicoPaymaster.feeCollector(), PAYMASTER_FEE_COLLECTOR.addr);
+    }
+
+    function test_OwnershipTransfer() external {
+        vm.startPrank(PAYMASTER_OWNER.addr);
+        vm.expectEmit(true, true, false, true, address(bicoPaymaster));
+        emit OwnershipTransferred(PAYMASTER_OWNER.addr, DAN_ADDRESS);
+        bicoPaymaster.transferOwnership(DAN_ADDRESS);
+        assertEq(bicoPaymaster.owner(), DAN_ADDRESS);
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_OwnershipTransferToZeroAddress() external {
+        vm.startPrank(PAYMASTER_OWNER.addr);
+        vm.expectRevert(abi.encodeWithSignature("NewOwnerIsZeroAddress()"));
+        bicoPaymaster.transferOwnership(address(0));
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_UnauthorizedOwnershipTransfer() external {
+        vm.startPrank(DAN_ADDRESS);
+        vm.expectRevert(abi.encodeWithSignature("Unauthorized()"));
+        bicoPaymaster.transferOwnership(DAN_ADDRESS);
+        vm.stopPrank();
+    }
+
+    function test_SetVerifyingSigner() external {
+        vm.startPrank(PAYMASTER_OWNER.addr);
+        vm.expectEmit(true, true, true, true, address(bicoPaymaster));
+        emit IBiconomySponsorshipPaymaster.VerifyingSignerChanged(
+            PAYMASTER_SIGNER.addr, DAN_ADDRESS, PAYMASTER_OWNER.addr
+        );
+        bicoPaymaster.setSigner(DAN_ADDRESS);
+        assertEq(bicoPaymaster.verifyingSigner(), DAN_ADDRESS);
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_SetVerifyingSignerToContract() external {
+        vm.startPrank(PAYMASTER_OWNER.addr);
+        vm.expectRevert(abi.encodeWithSignature("VerifyingSignerCannotBeContract()"));
+        bicoPaymaster.setSigner(ENTRYPOINT_ADDRESS);
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_SetVerifyingSignerToZeroAddress() external {
+        vm.startPrank(PAYMASTER_OWNER.addr);
+        vm.expectRevert(abi.encodeWithSignature("VerifyingSignerCannotBeZero()"));
+        bicoPaymaster.setSigner(address(0));
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_UnauthorizedSetVerifyingSigner() external {
+        vm.startPrank(DAN_ADDRESS);
+        vm.expectRevert(abi.encodeWithSignature("Unauthorized()"));
+        bicoPaymaster.setSigner(DAN_ADDRESS);
+        vm.stopPrank();
+    }
+
+    function test_SetFeeCollector() external {
+        vm.startPrank(PAYMASTER_OWNER.addr);
+        vm.expectEmit(true, true, true, true, address(bicoPaymaster));
+        emit IBiconomySponsorshipPaymaster.FeeCollectorChanged(
+            PAYMASTER_FEE_COLLECTOR.addr, DAN_ADDRESS, PAYMASTER_OWNER.addr
+        );
+        bicoPaymaster.setFeeCollector(DAN_ADDRESS);
+        assertEq(bicoPaymaster.feeCollector(), DAN_ADDRESS);
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_SetFeeCollectorToZeroAddress() external {
+        vm.startPrank(PAYMASTER_OWNER.addr);
+        vm.expectRevert(abi.encodeWithSignature("FeeCollectorCannotBeZero()"));
+        bicoPaymaster.setFeeCollector(address(0));
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_UnauthorizedSetFeeCollector() external {
+        vm.startPrank(DAN_ADDRESS);
+        vm.expectRevert(abi.encodeWithSignature("Unauthorized()"));
+        bicoPaymaster.setFeeCollector(DAN_ADDRESS);
+        vm.stopPrank();
+    }
+
+    function test_DepositFor() external {
+        uint256 dappPaymasterBalance = bicoPaymaster.getBalance(DAPP_ACCOUNT.addr);
+        uint256 depositAmount = 10 ether;
+        assertEq(dappPaymasterBalance, 0 ether);
+        vm.expectEmit(true, true, false, true, address(bicoPaymaster));
+        emit IBiconomySponsorshipPaymaster.GasDeposited(DAPP_ACCOUNT.addr, depositAmount);
+        bicoPaymaster.depositFor{ value: depositAmount }(DAPP_ACCOUNT.addr);
+        dappPaymasterBalance = bicoPaymaster.getBalance(DAPP_ACCOUNT.addr);
+        assertEq(dappPaymasterBalance, depositAmount);
+    }
+
+    function test_RevertIf_DepositForZeroAddress() external {
+        vm.expectRevert(abi.encodeWithSignature("PaymasterIdCannotBeZero()"));
+        bicoPaymaster.depositFor{ value: 1 ether }(address(0));
+    }
+
+    function test_RevertIf_DepositForZeroValue() external {
+        vm.expectRevert(abi.encodeWithSignature("DepositCanNotBeZero()"));
+        bicoPaymaster.depositFor{ value: 0 ether }(DAPP_ACCOUNT.addr);
+    }
+
+    function test_RevertIf_DepositCalled() external {
+        vm.expectRevert("Use depositFor() instead");
+        bicoPaymaster.deposit{ value: 1 ether }();
+    }
+
+    function test_WithdrawTo() external {
+        uint256 depositAmount = 10 ether;
+        bicoPaymaster.depositFor{ value: depositAmount }(DAPP_ACCOUNT.addr);
+        uint256 danInitialBalance = DAN_ADDRESS.balance;
+
+        vm.startPrank(DAPP_ACCOUNT.addr);
+        vm.expectEmit(true, true, true, true, address(bicoPaymaster));
+        emit IBiconomySponsorshipPaymaster.GasWithdrawn(DAPP_ACCOUNT.addr, DAN_ADDRESS, depositAmount);
+        bicoPaymaster.withdrawTo(payable(DAN_ADDRESS), depositAmount);
+        uint256 dappPaymasterBalance = bicoPaymaster.getBalance(DAPP_ACCOUNT.addr);
+        assertEq(dappPaymasterBalance, 0 ether);
+        uint256 expectedDanBalance = danInitialBalance + depositAmount;
+        assertEq(DAN_ADDRESS.balance, expectedDanBalance);
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_WithdrawToZeroAddress() external {
+        vm.startPrank(DAPP_ACCOUNT.addr);
+        vm.expectRevert(abi.encodeWithSignature("CanNotWithdrawToZeroAddress()"));
+        bicoPaymaster.withdrawTo(payable(address(0)), 0 ether);
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_WithdrawToExceedsBalance() external {
+        vm.startPrank(DAPP_ACCOUNT.addr);
+        vm.expectRevert("Sponsorship Paymaster: Insufficient funds to withdraw from gas tank");
+        bicoPaymaster.withdrawTo(payable(DAN_ADDRESS), 1 ether);
+        vm.stopPrank();
+    }
+
+    function test_ValidatePaymasterAndPostOp() external {
+        uint256 initialDappPaymasterBalance = 10 ether;
+        bicoPaymaster.depositFor{ value: initialDappPaymasterBalance }(DAPP_ACCOUNT.addr);
+
+        PackedUserOperation[] memory ops = new PackedUserOperation[](1);
+
+        uint48 validUntil = uint48(block.timestamp + 1 days);
+        uint48 validAfter = uint48(block.timestamp);
+
+        PackedUserOperation memory userOp = buildUserOpWithCalldata(ALICE, "", address(VALIDATOR_MODULE));
+        userOp.paymasterAndData = generateAndSignPaymasterData(
+            userOp, PAYMASTER_SIGNER, bicoPaymaster, DAPP_ACCOUNT.addr, validUntil, validAfter, 1e6
+        );
+        userOp.signature = signUserOp(ALICE, userOp);
+
+        bytes32 userOpHash = ENTRYPOINT.getUserOpHash(userOp);
+
+        ops[0] = userOp;
+
+        vm.startPrank(BUNDLER.addr);
+        vm.expectEmit(true, false, true, true, address(bicoPaymaster));
+        emit IBiconomySponsorshipPaymaster.GasBalanceDeducted(DAPP_ACCOUNT.addr, 0, userOpHash);
+        vm.expectEmit(true, false, false, true, address(bicoPaymaster));
+        emit IBiconomySponsorshipPaymaster.PremiumCollected(DAPP_ACCOUNT.addr, 0);
+        ENTRYPOINT.handleOps(ops, payable(BUNDLER.addr));
+        vm.stopPrank();
+
+        uint256 resultingDappPaymasterBalance = bicoPaymaster.getBalance(DAPP_ACCOUNT.addr);
+        assertNotEq(initialDappPaymasterBalance, resultingDappPaymasterBalance);
+    }
+
+    function test_RevertIf_ValidatePaymasterUserOpWithIncorrectSignatureLength() external {
+        PackedUserOperation[] memory ops = new PackedUserOperation[](1);
+
+        uint48 validUntil = uint48(block.timestamp + 1 days);
+        uint48 validAfter = uint48(block.timestamp);
+
+        PackedUserOperation memory userOp = buildUserOpWithCalldata(ALICE, "", address(VALIDATOR_MODULE));
+        userOp.paymasterAndData = generateAndSignPaymasterData(
+            userOp, PAYMASTER_SIGNER, bicoPaymaster, DAPP_ACCOUNT.addr, validUntil, validAfter, 1e6
+        );
+        userOp.paymasterAndData = excludeLastNBytes(userOp.paymasterAndData, 2);
+        userOp.signature = signUserOp(ALICE, userOp);
+
+        ops[0] = userOp;
+
+        vm.startPrank(BUNDLER.addr);
+        vm.expectRevert();
+        ENTRYPOINT.handleOps(ops, payable(BUNDLER.addr));
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_ValidatePaymasterUserOpWithInvalidPriceMarkUp() external {
+        PackedUserOperation[] memory ops = new PackedUserOperation[](1);
+
+        uint48 validUntil = uint48(block.timestamp + 1 days);
+        uint48 validAfter = uint48(block.timestamp);
+
+        PackedUserOperation memory userOp = buildUserOpWithCalldata(ALICE, "", address(VALIDATOR_MODULE));
+        userOp.paymasterAndData = generateAndSignPaymasterData(
+            userOp, PAYMASTER_SIGNER, bicoPaymaster, DAPP_ACCOUNT.addr, validUntil, validAfter, (2e6 + 1)
+        );
+        userOp.signature = signUserOp(ALICE, userOp);
+
+        ops[0] = userOp;
+
+        vm.startPrank(BUNDLER.addr);
+        vm.expectRevert();
+        ENTRYPOINT.handleOps(ops, payable(BUNDLER.addr));
+        vm.stopPrank();
+    }
+
+    function test_RevertIf_ValidatePaymasterUserOpWithInsufficientDeposit() external {
+        PackedUserOperation[] memory ops = new PackedUserOperation[](1);
+
+        uint48 validUntil = uint48(block.timestamp + 1 days);
+        uint48 validAfter = uint48(block.timestamp);
+
+        PackedUserOperation memory userOp = buildUserOpWithCalldata(ALICE, "", address(VALIDATOR_MODULE));
+        userOp.paymasterAndData = generateAndSignPaymasterData(
+            userOp, PAYMASTER_SIGNER, bicoPaymaster, DAPP_ACCOUNT.addr, validUntil, validAfter, 1e6
+        );
+        userOp.signature = signUserOp(ALICE, userOp);
+
+        ops[0] = userOp;
+
+        vm.startPrank(BUNDLER.addr);
+        vm.expectRevert();
+        ENTRYPOINT.handleOps(ops, payable(BUNDLER.addr));
+        vm.stopPrank();
+    }
+
+    function test_Receive() external {
+        uint256 initialPaymasterBalance = address(bicoPaymaster).balance;
+        uint256 sendAmount = 10 ether;
+        vm.startPrank(ALICE_ADDRESS);
+        vm.expectEmit(true, true, false, true, address(bicoPaymaster));
+        emit IBiconomySponsorshipPaymaster.Received(ALICE_ADDRESS, sendAmount);
+        (bool success,) = address(bicoPaymaster).call{ value: sendAmount }("");
+        vm.stopPrank();
+        assert(success);
+        uint256 resultingPaymasterBalance = address(bicoPaymaster).balance;
+        assertEq(resultingPaymasterBalance, initialPaymasterBalance + sendAmount);
+    }
+
+    function test_WithdrawEth() external {
+        uint256 initialAliceBalance = ALICE_ADDRESS.balance;
+        uint256 ethAmount = 10 ether;
+        vm.deal(address(bicoPaymaster), ethAmount);
+        vm.startPrank(PAYMASTER_OWNER.addr);
+        bicoPaymaster.withdrawEth(payable(ALICE_ADDRESS), ethAmount);
+        vm.stopPrank();
+        assertEq(ALICE_ADDRESS.balance, initialAliceBalance + ethAmount);
+        assertEq(address(bicoPaymaster).balance, 0 ether);
+    }
+
+    function test_RevertIf_WithdrawEthExceedsBalance() external {
+        uint256 ethAmount = 10 ether;
+        vm.startPrank(PAYMASTER_OWNER.addr);
+        vm.expectRevert("withdraw failed");
+        bicoPaymaster.withdrawEth(payable(ALICE_ADDRESS), ethAmount);
+        vm.stopPrank();
+    }
+}
diff --git a/test/foundry/unit/fuzz/TestFuzz_TestSponsorshipPaymasterWithPremium.t.sol b/test/foundry/unit/fuzz/TestFuzz_TestSponsorshipPaymasterWithPremium.t.sol
new file mode 100644
index 0000000..5fbf8fb
--- /dev/null
+++ b/test/foundry/unit/fuzz/TestFuzz_TestSponsorshipPaymasterWithPremium.t.sol
@@ -0,0 +1,83 @@
+// SPDX-License-Identifier: Unlicensed
+pragma solidity ^0.8.26;
+
+import { console2 } from "forge-std/src/Console2.sol";
+import { NexusTestBase } from "../../base/NexusTestBase.sol";
+import { IBiconomySponsorshipPaymaster } from "../../../../contracts/interfaces/IBiconomySponsorshipPaymaster.sol";
+import { BiconomySponsorshipPaymaster } from "../../../../contracts/sponsorship/SponsorshipPaymasterWithPremium.sol";
+
+contract TestFuzz_SponsorshipPaymasterWithPremium is NexusTestBase {
+    BiconomySponsorshipPaymaster public bicoPaymaster;
+
+    function setUp() public {
+        setupTestEnvironment();
+        // Deploy Sponsorship Paymaster
+        bicoPaymaster = new BiconomySponsorshipPaymaster(
+            PAYMASTER_OWNER.addr, ENTRYPOINT, PAYMASTER_SIGNER.addr, PAYMASTER_FEE_COLLECTOR.addr
+        );
+    }
+
+    function test_CheckInitialPaymasterState() external {
+        assertEq(bicoPaymaster.owner(), PAYMASTER_OWNER.addr);
+        assertEq(address(bicoPaymaster.entryPoint()), ENTRYPOINT_ADDRESS);
+        assertEq(bicoPaymaster.verifyingSigner(), PAYMASTER_SIGNER.addr);
+        assertEq(bicoPaymaster.feeCollector(), PAYMASTER_FEE_COLLECTOR.addr);
+    }
+
+    function testFuzz_DepositFor(uint256 depositAmount) external {
+        vm.assume(depositAmount <= 1000 ether);
+        vm.assume(depositAmount > 0 ether);
+        vm.deal(DAPP_ACCOUNT.addr, depositAmount);
+        uint256 dappPaymasterBalance = bicoPaymaster.getBalance(DAPP_ACCOUNT.addr);
+        assertEq(dappPaymasterBalance, 0 ether);
+        vm.expectEmit(true, true, false, true, address(bicoPaymaster));
+        emit IBiconomySponsorshipPaymaster.GasDeposited(DAPP_ACCOUNT.addr, depositAmount);
+        bicoPaymaster.depositFor{ value: depositAmount }(DAPP_ACCOUNT.addr);
+        dappPaymasterBalance = bicoPaymaster.getBalance(DAPP_ACCOUNT.addr);
+        assertEq(dappPaymasterBalance, depositAmount);
+    }
+
+    function testFuzz_WithdrawTo(uint256 withdrawAmount) external {
+        vm.assume(withdrawAmount <= 1000 ether);
+        vm.assume(withdrawAmount > 0 ether);
+        vm.deal(DAPP_ACCOUNT.addr, withdrawAmount);
+        bicoPaymaster.depositFor{ value: withdrawAmount }(DAPP_ACCOUNT.addr);
+        uint256 danInitialBalance = DAN_ADDRESS.balance;
+
+        vm.startPrank(DAPP_ACCOUNT.addr);
+        vm.expectEmit(true, true, true, true, address(bicoPaymaster));
+        emit IBiconomySponsorshipPaymaster.GasWithdrawn(DAPP_ACCOUNT.addr, DAN_ADDRESS, withdrawAmount);
+        bicoPaymaster.withdrawTo(payable(DAN_ADDRESS), withdrawAmount);
+        uint256 dappPaymasterBalance = bicoPaymaster.getBalance(DAPP_ACCOUNT.addr);
+        assertEq(dappPaymasterBalance, 0 ether);
+        uint256 expectedDanBalance = danInitialBalance + withdrawAmount;
+        assertEq(DAN_ADDRESS.balance, expectedDanBalance);
+        vm.stopPrank();
+    }
+
+    function testFuzz_Receive(uint256 ethAmount) external {
+        vm.assume(ethAmount <= 1000 ether);
+        vm.assume(ethAmount > 0 ether);
+        uint256 initialPaymasterBalance = address(bicoPaymaster).balance;
+        vm.startPrank(ALICE_ADDRESS);
+        vm.expectEmit(true, true, false, true, address(bicoPaymaster));
+        emit IBiconomySponsorshipPaymaster.Received(ALICE_ADDRESS, ethAmount);
+        (bool success,) = address(bicoPaymaster).call{ value: ethAmount }("");
+        vm.stopPrank();
+        assert(success);
+        uint256 resultingPaymasterBalance = address(bicoPaymaster).balance;
+        assertEq(resultingPaymasterBalance, initialPaymasterBalance + ethAmount);
+    }
+
+    function testFuzz_WithdrawEth(uint256 ethAmount) external {
+        vm.assume(ethAmount <= 1000 ether);
+        vm.assume(ethAmount > 0 ether);
+        uint256 initialAliceBalance = ALICE_ADDRESS.balance;
+        vm.deal(address(bicoPaymaster), ethAmount);
+        vm.startPrank(PAYMASTER_OWNER.addr);
+        bicoPaymaster.withdrawEth(payable(ALICE_ADDRESS), ethAmount);
+        vm.stopPrank();
+        assertEq(ALICE_ADDRESS.balance, initialAliceBalance + ethAmount);
+        assertEq(address(bicoPaymaster).balance, 0 ether);
+    }
+}