Security of payment in construction: getting paid in each state

What is security of payment legislation and why does it exist?

Security of payment (SOP) laws exist because subcontractors and suppliers sit at the bottom of a long contractual chain and are often the last to be paid.

The SOP Acts tackle this in three main ways:

• A statutory right to progress payments. If you carry out construction work or supply related goods and services under a construction contract, you are entitled to be paid progressively, even if the contract is verbal or says nothing about progress payments.
• Strict deadlines on the paying party. A party that receives a payment claim must respond on time, with reasons, or it can become liable for the full amount claimed.
• Rapid adjudication. A disputed claim can be decided by an independent adjudicator in a short, mostly paper-based process. The decision is binding for now, but the parties can still pursue their full contractual rights later in court or arbitration.

“Pay when paid” clauses generally have no effect, and you cannot contract out of the Act.

Which security of payment Act applies in each state and territory?

The Act that applies is the one for the place where the construction work is carried out, not where the contract was signed or where the businesses are based.

• New South Wales: Building and Construction Industry Security of Payment Act 1999.
• Victoria: Building and Construction Industry Security of Payment Act 2002, significantly amended from 15 April 2026.
• Queensland: Building Industry Fairness (Security of Payment) Act 2017, often called the BIF Act. It also contains Queensland’s trust account framework.
• Western Australia: Building and Construction Industry (Security of Payment) Act 2021, which replaced the old Construction Contracts Act. Its main parts commenced on 1 August 2022.
• South Australia: Building and Construction Industry Security of Payment Act 2009, with new regulations from 1 September 2026.
• Tasmania: Building and Construction Industry Security of Payment Act 2009.
• Australian Capital Territory: Building and Construction Industry (Security of Payment) Act 2009.
• Northern Territory: Construction Contracts (Security of Payments) Act 2004.

All except the NT follow the same broad payment claim and payment schedule model. The NT implies terms into the contract and allows adjudication once a “payment dispute” arises.

What is a payment claim and when can you make one?

A payment claim is your written request for a progress payment. It does not need to follow a set template, and in most states a tax invoice can be a valid payment claim if it contains the right information. Queensland’s regulator, for example, says a payment claim must identify the work or goods and services it relates to, state the amount claimed and request payment of that amount.

The rules on timing are where many claims fail:

• NSW: claims can be made on the reference dates in the contract, or on the last day of each month if the contract is silent, for work done in the previous 12 months. A head contractor claiming from the principal must also give a supporting statement declaring that its subcontractors have been paid.
• Victoria: since 15 April 2026, the old “reference date” concept has been replaced. A payment claim may be served on and from the last day of each named month in which work was carried out or goods and services supplied, and must be served before the later of any contract deadline and six months after practical completion.
• Queensland: claims are made on or after each reference date in the contract (or the last day of the month the work was done), and generally within six months of completing the work, with an extra window for final claims after the defects liability period.

How long does the other party have to respond with a payment schedule?

If the party receiving your claim (the respondent) does not intend to pay the full amount, it must give you a payment schedule: a written response that identifies the claim, states the amount it will pay and gives its reasons for paying less. Its reasons matter. In several states, including Queensland and now Victoria, a respondent cannot raise new reasons later in adjudication that were not in its payment schedule.

The deadlines vary. Some verified examples, where the contract does not set an earlier time:

• NSW: 10 business days after the claim is served.
• Victoria: 10 business days after the claim is served.
• Queensland: 15 business days after the claim is given.
• Western Australia: 15 business days after the claim is made.
• South Australia: 15 business days after the claim is served.
• Tasmania: 10 business days, extended to 20 business days where the respondent is the owner of land on which a house or other residential structure is being built and is not a building practitioner.
• ACT: 10 business days after the claim is given.
• NT: where the contract has no written provision on the point, the Act implies a term requiring a notice of dispute within 10 working days, or payment in full within 20 working days.

In most states, a respondent that misses the deadline becomes liable to pay the full claimed amount on the due date. The due date itself is set separately. In NSW, for example, unless the contract says earlier, payment is due 15 business days after a claim by a head contractor to the principal, and 20 business days after a claim by a subcontractor. Victoria now caps payment terms at 20 business days after a payment claim, even if the contract says longer. Queensland’s default is 10 business days if the contract is silent.

What can you do if you are not paid?

If you are not paid by the due date, the Acts give you several remedies. The main ones are:

• Adjudication. An independent adjudicator decides how much is payable. Application windows are short and differ by state. In NSW, you may apply within 10 business days of receiving a payment schedule you disagree with, or within 20 business days of the due date if you agreed with the schedule but were not paid. In Queensland, you must lodge within 30 business days after a payment schedule you disagree with, or within 20 business days after the due date if a scheduled amount was not paid. In the NT, you apply within 65 working days after the payment dispute arises.
• Suspending work. In NSW, after a written notice of your intention to suspend, stating that it is given under the Act, you may suspend work two business days later. Similar rights exist in other states, with different notice periods.
• Court action. You can sue to recover the unpaid amount as a debt, and in most states the respondent’s ability to raise defences is limited where it failed to give a payment schedule.

Adjudicators decide quickly on the documents, so the quality of your claim, records and submissions largely decides the outcome. Variations are a common source of disputed claims; our guide to variations and extensions of time explains how to document them so they survive adjudication.

Does security of payment apply to work for home owners?

This is the biggest difference between the states, and it catches out many residential builders and trades. Contracts between subcontractors and builders on a residential job are generally covered everywhere. The question is whether a builder can use the Act against the home owner.

• NSW: yes. Following amendments to the Act and its regulations, the NSW Act now applies to “owner occupier construction contracts”, where the person engaging the builder lives or proposes to live in the home. A head contractor uses a separate supporting statement form for these contracts.
• Victoria: generally no. The Act does not apply to a domestic building contract under the Domestic Building Contracts Act 1995 between a builder and a building owner, unless the owner is in the business of building residences and the contract is entered into in that business.
• Queensland: no for resident owners. QBCC states that adjudication cannot be used where the contract is for domestic building work with the resident owner of the property.
• Western Australia: the 2021 Act does not apply to a contract for home building work where the principal is an individual, the work is not for multiple dwellings or a residential development business, the contract value does not exceed $500,000 (or a higher prescribed amount), and the contract is not a subcontract.
• South Australia: the Act does not apply to residential building work for a person who lives, or proposes to live, in the premises.
• Tasmania: yes. The Act expressly extends to contracts relating to a residential structure, and gives a home owner who is not a building practitioner 20 business days to respond.
• ACT: the Act does not apply to insurable residential building work where a resident owner is a party, unless that person is, or should be, licensed as an owner-builder.

Where the Act does not apply, home owners and builders rely on their contract and the home building laws in their state, including their dispute resolution schemes. Our guide to statutory warranties and home warranty insurance covers the protections that run the other way, in favour of owners.

How do Queensland's project trusts and retention trusts work?

Queensland goes further than any other state by requiring some contract money to be held in trust. The framework commenced on 1 March 2021 under the BIF Act and has two parts:

• Project trust accounts (PTAs). On an eligible contract, the head contractor usually acts as trustee. The principal pays into the PTA, and subcontractors and the head contractor are paid out of it. A separate PTA is needed for each eligible contract.
• Retention trust accounts (RTAs). Where a PTA is required for the head contract, eligible cash retentions withheld from subcontractors must be held in a retention trust account until they are due to be paid. One RTA can be used across multiple projects.

The planned expansion to smaller contracts was paused in February 2025. Phases due on 1 March and 1 October 2025, which would have lowered the threshold to $3 million and then $1 million, will not occur. According to the QBCC, the framework continues to apply to:

• eligible Queensland Government contracts of $1 million or more
• private sector, local government, statutory authority and government-owned corporation contracts of $10 million or more.

Eligibility depends on more than the contract price. The value of “project trust work” must be more than half of the contract price, some contract types are exempt, and a variation that lifts the contract price by at least 30% can bring a contract into the regime part-way through. The Queensland Government has flagged further changes to reduce the administrative burden of trust accounts, so check QBCC’s trust account tool before you price or sign a large Queensland contract.

What changed in Victoria in 2026?

Victoria’s “excluded amounts” rules long stopped many variations, latent condition claims and delay costs from being claimed through its Act. The Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025 changed that from 15 April 2026. Key changes include:

• Excluded amounts repealed, so claimants can include items such as disputed variations and delay costs.
• Monthly claims from the last day of each month, replacing reference dates, with special rules for claims over the Christmas period.
• A 20 business day cap on payment terms for progress payments.
• A new definition of business day that excludes 22 December to 10 January.
• No new reasons in adjudication that were not in the payment schedule.
• New rules on performance security, including a notice before a party has recourse to it.

The changes apply to existing contracts as well as new ones, so review your Victorian payment claim and payment schedule templates now.

Checklist: protecting your right to be paid

• Confirm which Act applies, based on where the work is done, and whether your contract is excluded (especially for work for home owners).
• Read the payment clauses before you sign: claim dates, due dates, notice requirements and anything that looks like “pay when paid”.
• Make each payment claim valid: identify the work, state the amount, request payment and include anything your state requires, such as a supporting statement.
• Serve it properly and keep proof of the date and method of service.
• Diarise every deadline that runs from service: the payment schedule, the due date and the adjudication window.
• If you receive a claim, respond in time with a payment schedule that sets out all your reasons.
• Keep your records adjudication-ready: contract, variations, site diaries, photos, delivery dockets and correspondence. Our guide to building contract basics covers the clauses to check first.
• In Queensland, check trust account eligibility before the contract is signed, and again if a variation lifts the price.
• Get legal advice early if a claim is disputed or a deadline is close. Missing a deadline can cost you the statutory remedy.

Frequently asked questions