Payment Terms for Tradies in Australia: What to Set and Why (2026)
Most tradies copy their payment terms from the first invoice template they ever downloaded and never touch them again. That's an expensive habit. The terms on your invoice decide how fast you get paid, whether you can charge interest, whether you can claim under the Security of Payment Act, and whether builders can string you out for 60 days. This guide shows you what actually works in the Australian market in 2026 — and what to stop copying from overseas templates.
Standard payment terms used by Australian tradies in 2026
Different client types need different terms. The mistake most sole-trader tradies make is using one set of terms for everyone. A homeowner and a Tier 1 builder are not the same payer and shouldn't be treated like they are.
| Client type | Typical term | Deposit | Progress claims | Retention |
|---|---|---|---|---|
| Residential callout | Net 7 or on completion | None for small jobs | No | No |
| Residential project ($5k+) | Net 7 | 10–30% | Optional | No |
| Builder / main contractor | Net 14–30 | Rare | Yes — monthly | 5–10% common |
| Commercial direct | Net 14–30 | Negotiable | Yes for larger jobs | Sometimes |
| Strata / body corporate | Net 14–30 | None | Rarely | No |
| Insurance work | Net 14 on report approval | None | Depends on insurer | No |
The key insight: the stated term is less important than whether you enforce it. A net 7 with zero follow-up pays worse than a net 14 with an automated reminder at day 8.
When to take a deposit (and how much)
Deposits protect two things: your calendar and your materials exposure. You should take a deposit whenever cancellation would leave you out of pocket or out of booked time.
- 10% deposit — any job with booked labour time over half a day.
- 20–30% deposit — any job where you're buying materials upfront (tiles, fixtures, made-to-order items).
- 50% deposit — custom or made-to-order work where a cancellation leaves you holding specialty stock (most states have consumer law limits on deposits above 50% for domestic work — check before setting higher).
- No deposit — small residential callouts where you're on site anyway and the job is done within the hour.
Collect the deposit using a payment link (Stripe or Square) sent with the quote acceptance. Direct debit via GoCardless works well for recurring work. See the payments category hub for provider comparisons.
The Security of Payment Act: the fast-track every subbie should know about
If you do construction work as a subcontractor in Australia, you have statutory rights under the Security of Payment Act (SOPA) in your state. These rights exist whether or not your contract mentions them and generally cannot be contracted out of. The big advantage of SOPA over chasing through small claims court is speed — adjudication is designed to take weeks, not months.
The basic mechanism works like this:
- You serve a payment claim on the party above you in the contractual chain (builder, head contractor, principal).
- They have a short window (usually 10 business days) to respond with a payment schedule either agreeing or disputing.
- If they don't respond in time, or if they dispute, you can apply for adjudication through an authorised nominating authority.
- An independent adjudicator reviews and issues a determination within weeks, which is enforceable like a court judgment.
Each state has its own version of the Act (NSW, VIC, QLD, WA, SA, ACT, TAS, NT). The notice wording and timeframes vary slightly. For any claim over about $5,000, SOPA is usually faster and cheaper than going to the tribunal or court.
Important: this page is general information, not legal advice. For a specific dispute, talk to a construction lawyer or your state's adjudication authority.
Stop copying payment terms from overseas templates.
Pair the right terms with the right collection tool — invoice links, on-site EFTPOS, or direct debit — and your days-to-pay will drop inside a month.
Read: How to Get Paid Faster →Frequently Asked Questions
Net 7 is the right default for residential callout and small-job work. Net 14 or net 30 is common for commercial and builder work and should be paired with progress claims on anything over about $5,000. Add a deposit clause of 10–30% on any job with materials exposure or scheduled labour. Avoid "payable on receipt" — it's unenforceable in practice.
Net 7 for residential — it creates urgency and matches how homeowners actually pay. Net 14 for commercial and builders because their AP cycles ignore shorter terms anyway. Match the term to the reality of who is paying.
Yes, provided the right to charge interest is stated in your contract or terms before the work starts. A clause like "Interest of 1.5% per month will accrue on invoices more than 14 days overdue" is standard. You generally can't add interest retrospectively. SOPA also provides statutory interest rights on unpaid construction progress claims.
SOPA is state-based legislation giving contractors and subcontractors a fast-track statutory right to claim progress payments and pursue unpaid amounts through adjudication instead of court. It applies to most building, electrical, plumbing, and civil trades under construction contracts. Each state has its own version with slightly different thresholds. If you're a subcontractor owed money, SOPA is usually faster than small claims court.