Late payment is one of the biggest headaches in the trades. You've bought the materials, paid your subbies and done the work, and now you're waiting. A few slow payers can leave you short for wages, super and the BAS, even when the business is doing well on paper.
This guide covers how to set up your quotes and invoices so you get paid on time, what to do when an invoice goes overdue, and how the security of payment laws in each state can help if you work for builders or other businesses. It's general information for sole traders and small trade businesses in Australia, current as at November 2026.
Set yourself up to be paid before you start
The best time to deal with late payment is before the job starts. business.gov.au's guide to payment terms recommends agreeing terms upfront and putting them in writing. For a trade business, that means:
- Payment terms on every quote. State when payment is due, for example 7 or 14 days from the invoice date, or on completion.
- Deposits and progress payments. For bigger jobs, agree payment stages tied to clear milestones. Check your state's rules first: some states cap deposits for residential building work. Our guide to how to quote a job covers written contract thresholds by state.
- Written acceptance. Get the customer to accept the quote in writing or by signature before you start, so there's no argument about the price or scope later.
- Variations in writing. If the customer asks for extra work, confirm the price before you do it.
Invoice straight away
Every day you wait to send an invoice is a day added to when you get paid. Send it the day you finish, while the customer is happy and the job is fresh.
A good invoice makes paying easy:
- a clear invoice number, date and due date,
- what you did, matching the quote,
- the total, with GST shown if you're registered,
- your ABN, and the words "tax invoice" if you're registered for GST, and
- how to pay, such as your bank details or PayID.
The ATO's tax invoice rules set out exactly what a tax invoice must show.
Tradie Business lets you turn an accepted quote into an invoice in a few taps, email it with a printable link, and track payments against it. Online card payments are coming soon and aren't available yet, so customers currently pay you directly by bank transfer or your usual methods.
When an invoice goes overdue
From finished job to paid invoice Illustrative
The steps this guide recommends when an invoice goes unpaid.
- Agree terms firstPayment terms in the quote and contract, before you start.
- Invoice on the dayClear amount, due date and how to pay.
- Friendly reminderA short email or call around the due date.
- Firm follow-upCall, agree a date or a payment plan, and confirm it in writing.
- Formal stepsLetter of demand, a security of payment claim, mediation or a tribunal.
Most late payers aren't refusing to pay. They've forgotten, they're waiting on a pay cycle, or the invoice went to the wrong person. A calm, quick follow-up fixes most of them.
- A friendly reminder. Send a short email or text around the due date with the invoice attached. Keep it polite and factual.
- A phone call. If it's a week overdue, call. Ask when you can expect payment and confirm it by email.
- A payment plan. If the customer is struggling, agreeing to instalments is often better than chasing for months. Put it in writing.
- A letter of demand. If they still don't pay, business.gov.au explains how to write a letter of demand: the amount, what it's for, a deadline, and what you'll do next.
- Formal action. That can mean a security of payment claim (see below), mediation, or a small claims tribunal or court in your state.
business.gov.au's page on what to do when you haven't been paid walks through each option. Whatever you do, keep it professional. The ACCC's debt collection guideline says creditors and collectors must not harass or mislead people they're chasing.
Tradie Business has overdue invoice reminders, off by default. Once you switch them on, they send polite emails before and after the due date and stop when the invoice is paid.
Should you charge interest or late fees?
Only if the customer agreed to it before the work started. A late fee or interest charge that isn't in your quote or contract is hard to enforce and can sour a good customer relationship. If you want the option, put a clear clause in your terms, for example the interest rate and when it starts, and apply it consistently. Many tradies find a prompt phone call works better than a penalty, and keep the late fee for customers who repeatedly pay late.
Security of payment: what it is
Every state and territory has a security of payment law for the building and construction industry. These laws give people who carry out construction work, or supply related goods and services, a statutory right to make a payment claim and have disputes decided quickly by an independent adjudicator, without going to court.
They matter most if you work for builders, head contractors or other businesses. The basic process is similar everywhere:
- You give the customer a payment claim for the work you've done.
- If they don't intend to pay the full amount, they must give you a payment schedule within a set time, saying how much they will pay and why.
- If they don't give a payment schedule in time, they generally owe the full amount claimed.
- If you disagree with the schedule, or they don't pay, you can apply for adjudication within strict deadlines.
The details differ between states, so check the rules where the work is done.
Security of payment: key timeframes in four states
Each state has its own security of payment law. These are the headline timeframes for a payment claim.
| State | Payment schedule (if they won't pay in full) | When payment is due | Homeowner work | Source |
|---|---|---|---|---|
| NSW | Within 10 business days of the claim, or they owe the full amount | Head contractor: 15 business days. Subcontractor: 20 business days (10 for exempt residential work) | The Act also covers owner-occupier construction contracts | NSW Government, Making a payment claim under Security of Payment laws |
| VIC | Within 10 business days of the claim (or earlier if the contract says) | The date in the contract | Doesn't apply to domestic building contracts with a homeowner (subcontracts under them are covered) | Building and Plumbing Commission (Vic), Making a payment claim under the SOP Act; Victorian Legislation, Building and Construction Industry Security of Payment Act 2002 |
| QLD | Within 15 business days of the claim (or earlier if the contract says) | The contract date, or 10 business days if none. Subcontract terms over 25 business days are void | Check with the QBCC for domestic work | QBCC, Request payment; QBCC, Respond to a payment request |
| WA | Within 15 business days of the claim (or earlier if the contract says) | The contract date, within the limits set by the Act | A claim to a homeowner must include a homeowner's notice | WA Government, Responding to a payment claim |
New South Wales
The NSW Government's page on making a payment claim says the respondent has a maximum of 10 business days after the claim to give a payment schedule. Payment is due no later than 15 business days after the claim for a head contractor claiming from the principal, and 20 business days for a subcontractor. The NSW Act also covers owner-occupier construction contracts. A subcontractor's claim connected with residential work must include a statement that it's made under the Act.
Victoria
Victoria's Act doesn't apply to domestic building contracts between a builder and a homeowner, according to the Building and Plumbing Commission. Subcontractors working for the builder are still covered. Under the Act, a payment schedule must be provided within 10 business days of the claim, or earlier if the contract requires.
Queensland
The QBCC's request payment page says payment is due on the date in the contract, or 10 business days after the claim if the contract doesn't say. For subcontracts, payment terms longer than 25 business days are void, and for commercial building contracts the limit is 15 business days. "Pay when paid" clauses have no effect. If the respondent won't pay in full, the QBCC says they must give a payment schedule within 15 business days.
Western Australia
WA's 2021 Act requires a payment schedule within 15 business days of the claim, or earlier if the contract says, according to the WA Government's guide to responding to a payment claim. A claim made to a homeowner must include a homeowner's notice.
Other states and territories
SA, Tasmania, the ACT and the NT each have their own security of payment laws, with different timeframes and forms. Check your state regulator's website before you make a claim, because missing a deadline can cost you the right to adjudication.
Tips for subcontractors
- Read the contract before you sign. Look for the payment terms, retention, how variations are approved and when claims can be made.
- Keep records. Photos, daily job logs, variation approvals and delivery dockets make a claim much stronger. Tradie Business has a daily job log with photos for exactly this.
- Diarise every deadline. Security of payment timeframes are strict and counted in business days.
- Get advice early. If a large amount is at stake, talk to a lawyer or your industry association before deadlines pass.
Where to get help
- business.gov.au for chasing unpaid invoices.
- The Australian Small Business and Family Enterprise Ombudsman for help with disputes with other businesses.
- Your state's security of payment regulator for claims and adjudication.
Getting paid on time starts with charging the right amount. See our guide to setting your hourly rate, and keep your books in order with our bookkeeping routine.
