Payment terms clause: what it means, a typical example, and what to ask for
The payment clause sets when you can claim, how the builder must respond, and how many days it has to pay. The number of days matters, and so does what starts the clock: "30 days from the end of the month" can mean 60 days from the work. Queensland, New South Wales, Victoria and Western Australia cap payment terms by statute.
A typical builder version
The Subcontractor may submit a payment claim on the 25th day of each month. The Contractor will pay the amount certified within 45 days after the end of the month in which the payment claim is received.
Illustrative wording of the kind found in builder-authored subcontracts, not taken from any one contract.
What it means for you
A claim made on the 25th is paid 45 days after the end of that month, about 50 days after you claimed and longer after you did the work.
- Days counted from the end of the month, or from an approval the builder controls.
- Terms longer than your state's statutory cap.
- Payment of the "amount certified" rather than the amount claimed when no schedule is given.
What market looks like
Payment within 25 to 30 days of the payment claim, counted from the claim date. Queensland and Western Australia cap subcontract payment terms at 25 business days; in New South Wales a head contractor must pay a subcontractor within 20 business days of the claim; and since 15 April 2026 Victoria caps progress payments at 20 business days. A longer term is not enforceable on that point.
What to ask for
"The Contractor must pay the amount of each payment claim, less any amount set out in a payment schedule served within the time required by the Security of Payment Act, within 20 business days after the payment claim is received."
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Common questions
What are normal payment terms for a subcontractor in Australia?
The median across the subcontracts we've analysed is about 25 days from claim to payment. Anything past 45 days is high risk, and in several states it is beyond the statutory cap.
Is "30 days end of month" legal?
It depends on the state and how many business days it adds up to. In Queensland, New South Wales, Victoria and Western Australia, terms that run past the statutory cap are unenforceable to that extent.
One clause rarely tells the whole story
The free scanner reads the whole subcontract, benchmarks every clause against the Index, applies your state's Security of Payment Act, and drafts the email to send the builder.
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General information, not legal advice. Example wording is illustrative. Check any clause you rely on against your full contract and your state's Security of Payment Act. Written by Mat Kennedy, The Construction Contracts Co.