Security of payment in NSW: 20 business days, 10 to answer

The New South Wales Building and Construction Industry Security of Payment Act 1999 is the oldest of eight jurisdictions, eight sets of deadlines and the one most often copied. It is also the one where the largest number of claims fail on paperwork rather than merit.

Three provisions do most of the work: s 11 decides when the money falls due, s 14 gives the other side ten business days to answer, and s 13(7) turns a missing declaration into an offence.

Section 11: two due dates, and a ceiling over both

The Act splits the timetable by who is being paid.

"(1A) A progress payment to be made by a principal to a head contractor under a construction contract (other than an exempt residential construction contract) becomes due and payable on — (a) the date occurring 15 business days after a payment claim is made under Part 3 in relation to the payment, except to the extent paragraph (b) applies, or (b) an earlier date as provided in accordance with the terms of the contract."

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"(1B) A progress payment to be made to a subcontractor … becomes due and payable on — (a) the date occurring 20 business days after a payment claim is made … or (b) an earlier date as provided in accordance with the terms of the contract."

Note the direction of travel. The contract can only make it earlier. Section 11(8) closes the other side:

"A provision in a construction contract has no effect to the extent it allows for payment of a progress payment later than the relevant date it becomes due and payable under subsection (1A) or (1B)."

So a subcontract with 45-day terms is not a 45-day subcontract in New South Wales. It is a 20-business-day subcontract with 25 days of unenforceable text in it. Victoria reached the same kind of ceiling only in 2025, and set it at a flat 20 business days rather than New South Wales's 15/20 split — see what the 2025 rewrite changed.

Interest runs from the due date at whichever is greater of the rate prescribed under s 101 of the Civil Procedure Act 2005 or the rate in the contract (s 11(2)). A claimant is also given a lien over unfixed plant or materials it supplied (s 11(3)), subject to earlier interests (s 11(4)).

The residential exception

Section 11(1C) carves out exempt residential construction contracts: the due date is whatever the contract says, or 10 business days after the claim if the contract is silent.

The definition matters because it reaches beyond the head contract. An owner occupier construction contract is "a construction contract for the carrying out of residential building work within the meaning of the Home Building Act 1989 on such part of any premises as the party for whom the work is carried out resides or proposes to reside in", and an exempt residential construction contract includes "a construction contract that is connected with an owner occupier construction contract". A subcontract on a renovation for the people living in the house sits inside that carve-out — the same Home Building Act definition of residential building work also sets the licensing threshold for the work itself, covered in Builder licence thresholds in NSW, Victoria and Queensland.

Section 13: what a payment claim has to be, and the statement that has to travel with it

A payment claim must do three things (s 13(2)):

• identify the construction work or related goods and services the payment relates to;
• indicate the claimed amount;
• state that it is made under this Act.

The third one is a single line of text and it is the most common reason a claim is not a claim.

Timing is governed by s 13(1A): a claim may be served "on and from the last day of the named month in which the construction work was first carried out … and on and from the last day of each subsequent named month", unless the contract sets an earlier day (s 13(1B)). Where the contract has been terminated, s 13(1C) allows a claim from the date of termination.

The long-stop is s 13(4): a claim may be served only within "the period determined by or in accordance with the terms of the construction contract, or the period of 12 months after the construction work to which the claim relates was last carried out … whichever is the later."

And s 13(5) limits you to one claim per named month unless the contract says otherwise — though s 13(6) makes clear you may still put more than one progress payment in a single claim, include an amount previously claimed, or claim this month for work done in an earlier month.

The supporting statement is an offence provision

If you are a head contractor serving on the principal, s 13(7):

"A head contractor must not serve a payment claim on the principal unless the claim is accompanied by a supporting statement that indicates that it relates to that payment claim. Maximum penalty — 1,000 penalty units in the case of a corporation or 200 penalty units in the case of an individual."

Section 13(9) defines it: "a statement that is in the form approved by the Secretary and (without limitation) that includes a declaration to the effect that all subcontractors, if any, have been paid all amounts that have become due and payable in relation to the construction work concerned."

Section 13(8) then deals with a false one, and the penalty changes shape: "1,000 penalty units in the case of a corporation or 200 penalty units or 3 months imprisonment (or both) in the case of an individual." A note adds that an offence by a corporation under either subsection "is an executive liability offence attracting executive liability for a director or other person involved in the management of the corporation".

This is the provision to think about before signing the monthly claim on autopilot. The declaration is about your subcontractors, not about your claim.

Section 14: ten business days, and what silence costs

"(4) If — (a) a claimant serves a payment claim on a respondent, and (b) the respondent does not provide a payment schedule to the claimant — (i) within the time required by the relevant construction contract, or (ii) within 10 business days after the payment claim is served, whichever time expires earlier, the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates."

"Whichever time expires earlier" is the phrase to read twice. If your subcontract says five business days, the deadline is five.

A payment schedule must identify the claim and state the scheduled amount (s 14(2)), and if the scheduled amount is less, it "must indicate why the scheduled amount is less and (if it is less because the respondent is withholding payment for any reason) the respondent's reasons for withholding payment" (s 14(3)).

If they schedule nothing and pay nothing

Section 15 gives the claimant two doors and a lever:

"(2) In those circumstances, the claimant — (a) may — (i) recover the unpaid portion of the claimed amount from the respondent, as a debt due to the claimant, in any court of competent jurisdiction, or (ii) make an adjudication application under section 17(1)(b) …, and (b) may serve notice on the respondent of the claimant's intention to suspend carrying out construction work …"

And then the part that gives the regime its teeth, s 15(4):

"(a) judgment in favour of the claimant is not to be given unless the court is satisfied of the existence of the circumstances referred to in subsection (1), and (b) the respondent is not, in those proceedings, entitled — (i) to bring any cross-claim against the claimant, or (ii) to raise any defence in relation to matters arising under the construction contract."

Defective work, delay, back charges, a disputed variation — none of it is available. The respondent's only route back is to pay and then sue.

Section 16 does the same for the case where a schedule was given but the scheduled amount was not paid.

Section 17: the adjudication clocks

If you are going to adjudication rather than court, the windows are short and they differ by scenario:

The third row is a trap in its own right. Where no schedule was given, you cannot go straight to adjudication: s 17(2) requires written notice of your intention, and then "the respondent has been given an opportunity to provide a payment schedule to the claimant within 5 business days after receiving the claimant's notice". Skipping that step invalidates the application.

Two more provisions worth knowing

Pay when paid is void. Section 12(1): "A pay when paid provision of a construction contract has no effect in relation to any payment for construction work carried out or undertaken to be carried out … under the contract." The definition in s 12(2) catches clauses that make the due date depend on the head contractor being paid, not only clauses that make the liability depend on it. "Payment within 7 days of receipt of funds from the principal" is squarely inside paragraph (b).

Retention money can be required to be held in trust. Section 12A empowers regulations requiring a head contractor to hold retention money "in trust for the subcontractor entitled to the money" in a retention money trust account, with records open to inspection by the Small Business Commissioner or the subcontractor, and a penalty of up to 1,000 penalty units for non-compliance with those regulations. Section 12A(5) defines retention money as "money retained by a head contractor out of money payable by the head contractor to a subcontractor under a construction contract, as security for the performance of obligations of the subcontractor". Queensland runs a far more developed version of the same idea, with statutory project and retention trusts a subcontractor is a beneficiary of by force of the Act — see 15 business days to answer.

What this changes about your invoicing

• Put the naming line on every progress claim: that it is made under the Building and Construction Industry Security of Payment Act 1999. It costs nothing and it is jurisdictional.
• Record the date of service. Every clock in this article runs from service, not from the date printed on the invoice.
• Diarise two dates per claim: their last day for a payment schedule, and your due date. If you subcontract, use the contractual period when it is shorter than ten days.
• Do the supporting statement properly if you are the head contractor. It is a declaration about payments you have already made, so it can only be signed honestly if you know what your subcontractors are owed at that moment.
• Read your own subcontract against s 11(8). Anything past 20 business days for a subcontractor is text without effect, and relying on it is how disputes start.

There is a second, quieter consequence. Residential contracts in New South Wales must carry an explanation of this Act: cl 8(1)(b) of the Home Building Regulation 2014 requires a contract to which s 7 of the Home Building Act 1989 applies — that is, over $20,000 under cl 5(1)(b) — to include "information, in the approved form, that explains the operation of the Building and Construction Industry Security of Payment Act 1999 and the Building and Construction Industry Security of Payment Regulation 2020." Two statutes, one contract pack.

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Checked on 29 August 2026 against the in-force consolidation of the Act on the NSW legislation register. This describes the legislation; it is not legal advice, and security of payment is a field where the case law on service, on what a payment claim must identify, and on jurisdictional error decides real disputes.

What Zirko does: it records what was sent and when, keeps invoices and quotes attached to the project they belong to, and keeps time entries per person per day, which is the evidence behind a claimed amount. What Zirko does not do: it does not know which contracts are exempt residential construction contracts, does not calculate the s 11 due date, and does not generate a supporting statement or a payment schedule.