Back charge dispute letter: challenge a deduction from your payment

A back charge is the builder deducting money from your payment for something it says you owe: rectification, cleaning, damage, delays, another trade's costs. Many arrive with no notice and no evidence. Challenge every one in writing, fast: what you don't dispute now tends to become accepted, and the payment schedule rules may limit what the builder can rely on later.

When to use it

A back charge or contra appears on a payment schedule or remittance
A deduction was made without notice, particulars or evidence
The charge relates to work that wasn't yours, or was caused by others

In the Word and PDF: The dispute letter; A table of each back charge and your answer; The request for particulars and evidence. Every [placeholder] is highlighted so nothing gets missed.

Where is the work? (sets the Act referenced in the template)

DISPUTE OF BACK CHARGE

[Subcontractor company name, ABN]
Date: [date]
To: [respondent legal entity, ABN], Attention: [contract administrator]
Contract: [subcontract title / number]
Project: [project name / site address]

Re: Back charge(s) deducted from [payment schedule / remittance] dated [date]

We dispute the following back charges:

Reference | Description | Amount | Our response
[ref] | [e.g. cleaning level 3] | $[amount] | [no notice given; area was cleaned on [date], photos attached]
[ref] | [e.g. damage to ceiling] | $[amount] | [damage caused by [other trade]; not our work]
[ref] | [e.g. delay costs] | $[amount] | [no particulars or calculation provided]

1. No written notice of these charges, with particulars and the calculation, was given to us before the deduction was made[, as clause [X] of the subcontract requires].

2. Please provide by [date], for each charge: the clause relied on, the date and nature of the alleged event, the evidence (photos, dockets, invoices), and how the amount was calculated.

3. Unless and until each charge is substantiated and agreed, please pay the withheld amount of $[amount] with the next payment.

We reserve our rights under the subcontract and the Building Industry Fairness (Security of Payment) Act 2017 (QLD), including to claim the withheld amount in our next payment claim and to apply for adjudication.

Regards,
[name, position]
[company]
[phone / email]

Download Word (.docx)Download PDF

Free to use and adapt. Replace every [bracketed placeholder] and verify the Act section and notice period for your state before sending.

Template, not legal advice. Your contract's clauses and your state's Act govern. Check both (especially clause numbers, notice periods and service requirements) before this goes out on a real dispute.

Using it well

Dispute within days, not months

A charge left unanswered starts to look accepted, and the evidence that would disprove it (site photos, dockets, who was where) gets harder to find every week.

Ask for the calculation

Many back charges are round numbers with no build-up. Asking how the amount was calculated is fair, and it often ends the charge.

Put it back in your next claim

Include the withheld amount in your next payment claim. The builder then has to give its reasons in a payment schedule on time, and the dispute can go to adjudication if needed.

The template protects the claim. The contract decides it.

Your notice windows, the clause numbers and whether the bar is absolute all live in your subcontract. The free scanner reads them in about two minutes, benchmarked against real Australian subcontracts.

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Common questions

What does back charge mean in construction?

A back charge is an amount a builder deducts from a subcontractor's payment for costs it says the subcontractor caused: rectification, cleaning, damage, delays or another trade's work. Whether it can do so, and how, depends on the set-off and back charge clauses in your subcontract.

Can a builder back charge without notice?

Only if your subcontract allows it, and many do. Even then, under the Security of Payment Acts a builder paying less than claimed generally has to state its reasons in a payment schedule served on time.

How do I dispute a back charge?

In writing, quickly: identify each charge, give your answer, ask for particulars and evidence, and ask for the withheld amount to be paid. Then include it in your next payment claim.

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General information and a starting-point template, not legal advice. Contracts and state Acts differ and change. Verify clause numbers, statutory sections, notice periods and service requirements before use, and get advice on a live dispute. Nothing on this page is uploaded or stored. Built by Mat Kennedy at The Construction Contracts Co.