If you’ve ever done the work, sent the invoice and then waited while a builder “processed” it for two months, security of payment laws are your friend. They were built for exactly that problem. This guide covers the basics as they apply across Australia, the key differences between some states, and how to protect your cash flow while the process runs. It’s general information only, so get advice for your state before relying on it for a specific dispute.
Key takeaways
- Every state and territory has a security of payment Act giving a statutory right to progress payments for construction work.
- A proper payment claim starts the clock. The other party must pay or respond with a payment schedule by a set deadline.
- If they don’t pay, or pay less, you can usually apply for adjudication, a fast process that’s cheaper than court.
- Deadlines, claim wording and exclusions differ by state, and some states changed their rules recently.
- Even when the process works, there’s still a cash gap. Plan how you’ll fund wages and materials while you wait.
What is security of payment law?
Security of payment laws give anyone who carries out construction work, or supplies related goods and services under a construction contract, a right to be paid progress payments. They set up a simple process:
- Payment claim. You serve a written claim for work done.
- Payment schedule. The other party either pays by the due date or serves a payment schedule saying how much they’ll pay and why they’re withholding the rest.
- Adjudication. If they don’t respond, don’t pay or pay less than you claimed, you can apply to have an independent adjudicator decide, usually within weeks.
In NSW, the government explains that contractors have the right to progress payments “whether a contract is verbal, written or absent, and even if a contract states the contractor cannot claim progress payments”.
How do the rules differ between states?
The core idea is the same everywhere, but the detail isn’t. Here are some verified examples from official sources. Always check the current rules for your state.
| State | Payment schedule deadline | Other points worth knowing | Official source |
|---|---|---|---|
| NSW | 10 business days after the claim | Progress claims generally once a month unless the contract says otherwise; maximum payment timeframes for head contractors and subcontractors | NSW Government |
| Victoria | 10 business days | Amendments from 15 April 2026 extended the time to make a claim from 3 to 6 months, removed “excluded amounts” and capped payment terms at 20 business days | Building and Plumbing Commission |
| Queensland | 15 business days, or earlier if the contract says | Default payment within 10 business days if the contract is silent; pay when paid clauses are void | QBCC |
| Western Australia | 15 business days, or earlier if the contract says | Claim must state it’s made under the Building and Construction Industry (Security of Payment) Act 2021 | Small Business Development Corporation |
Other states and territories have their own Acts with their own timeframes. Check with your state building authority, or get advice for your state.
What should a payment claim include?
Requirements vary, but a good claim generally:
- identifies the work or goods and services the claim covers
- states the amount being claimed
- requests payment of that amount
- is served on the right person, in the way the contract or Act allows
- is made on or after the right date under your contract (often called the reference date)
- includes any wording your state requires, such as WA’s statement that it’s made under the Act
Queensland’s QBCC, for example, says a claim must identify the work, state the amount and request payment (QBCC).
Are there exclusions I should know about?
Yes. Some contracts are treated differently, particularly work done directly for a homeowner who lives in the property. In NSW, for example, the Act doesn’t apply to some types of work contracted directly with a person who lives or intends to live at the property (NSW Government FAQs). If most of your work is for owner occupiers, check how your state treats it.
Do business days include the Christmas break?
Not always. In Queensland, the QBCC says 22 December to 10 January doesn’t count as business days for security of payment purposes. Claims served in mid December can have their deadlines pushed well into January. Our guide to Christmas shutdown cash flow covers how to plan for it.
A step by step claims routine for tradies
- Know your dates. Write down each contract’s claim dates and the response deadlines for your state.
- Claim on the day. Don’t wait until the end of the month if the contract lets you claim now.
- Use a template. Include every element your state requires, every time.
- Serve it properly and keep proof of how and when you served it.
- Diary the payment schedule deadline and the payment due date.
- Follow up early. A phone call before the deadline often gets money moving.
- Act on the deadline. If you get no schedule or a short payment, decide quickly whether to apply for adjudication, because application windows are short.
- Keep records. Photos, site diaries, signed variations and emails all help if it comes to adjudication.
Why security of payment doesn’t fix cash flow on its own
Even when everything goes right, you’ve still paid wages and materials for weeks before the money arrives. If the claim is disputed, adjudication adds more time. A statutory right to be paid is valuable, but it doesn’t pay this Friday’s wages.
Example: A plastering subbie in Brisbane serves a $120,000 payment claim on a townhouse job. The builder serves a payment schedule for $70,000, disputing the rest. The subbie applies for adjudication for the balance, but still has a crew of six to pay in the meantime. A short term unsecured cash flow loan for tradies covers four weeks of wages, and he repays it when the adjudicated amount is paid.
How can finance bridge the gap?
| Situation | Option |
|---|---|
| Waiting on a claim or retention | Progress payment gap finance |
| Subbie with a slow paying head contractor | Subcontractor finance |
| No property, trading 6+ months | Unsecured cash flow loan, sized to turnover |
| Own property with equity | Second mortgage, or a caveat loan in Victoria only |
Key facts
- Loan size: $20,000 to $5 million, for business purposes
- Unsecured: 6+ months trading with an ABN; some approved and funded within hours
- Property secured: against property you already own; no financials needed; as little as 24 hours in some cases
- Term: property secured loans typically 1 to 12 months
- Pricing: every loan is priced on your circumstances; we find the sharpest rate available for your situation
Don’t let a slow payer stall your business
Use your security of payment rights to get paid, and use finance to keep working while you wait. Check your options in about 60 seconds. It won’t affect your credit score, there’s no cost to enquire, and we’ll tell you quickly if we can help.
