Quick answer
- A builder must reply to your payment claim with a payment schedule within 15 business days, and pay a subbie within 25 business days at most.
- No schedule means they owe the full claim. You can recover it as a debt or through adjudication.
- If you hold retention on a contract over $20,000 (including GST) signed since 1 February 2024, it must sit in a separate trust account. It isn't your cash.
Part 1: Getting paid
Make a valid payment claim
The Building and Construction Industry (Security of Payment) Act 2021 only protects you if your claim is valid. It must be in writing, show the amount and the work done, and say: "This is a payment claim made under the Building and Construction Industry (Security of Payment) Act 2021." Claim within six months of doing the work, and keep proof of when you sent it.
The clocks that matter
| Step | Deadline |
|---|---|
| Builder gives you a payment schedule | 15 business days after your claim |
| Subbie gets paid | No later than 25 business days after the claim |
| Head contractor gets paid by the client | No later than 20 business days after the claim |
| You apply for adjudication | Within 20 business days of becoming entitled |
| You suspend work | 2 business days' written notice |
A contract can make these shorter, not longer. And "pay when paid" clauses are void. A builder can't make you wait until their client pays them.
Builder hasn't paid. What can I do?
- No payment schedule? They're liable for the full amount you claimed. Recover it as a debt, or give written notice that you intend to go to adjudication. They then get 5 business days to send a schedule.
- Schedule says less, or they don't pay? Apply for adjudication within 20 business days. It's quick, and fees are usually split between both sides.
- Still nothing? Suspend work on 2 business days' written notice.
Part 2: Retention money
Does the trust rule apply to you?
Yes, if you withhold retention under a contract worth over $20,000 including GST entered on or after 1 February 2024 (over $1 million from 1 February 2023). The party withholding the money is the trustee. Some contracts are exempt, including head contracts directly with government.
What you must do
- Open a bank account within 10 business days of signing. Its name must include the words "trust account".
- Deposit retention as soon as you deduct it, and tell the subbie the account details in writing.
- Keep a trust ledger and reconcile the account monthly, within 10 working days of month end. Keep the records for 3 years.
- Only withdraw to release retention under the contract, after an adjudicator or court decision, to fix an error, or after the defects period ends.
Get it wrong and the subbie can suspend work, a court can order you to fund the account, and you're exposed for breach of trust. If someone holds your retention, you're entitled to inspect their records for free.
Our view
This is a cash-flow problem dressed up as a legal one. Retention is no longer working capital. If you've been quietly funding jobs with subbies' retention, that buffer is gone. Model your cash before you take the next big job.
Two accounting traps we see:
- GST: on the accruals basis, if your tax invoice shows the full claim including retention, GST on the whole amount is due in that BAS. You could be paying GST on money you won't see for a year.
- Builder registration: money in a retention trust isn't yours. Don't count it as liquid funds when you prove your financial position to the Building Services Board.
Set up the trust account in Xero as its own bank account, with separate retention payable and receivable accounts.
What to do this week
- Check every claim template carries the Act's wording.
- Diary the 15 and 20 business day deadlines on every unpaid claim.
- List every contract since 1 February 2024 where you hold retention, and check the trust account is open and reconciled.
- Check how your invoices show retention for GST.
Frequently asked questions
How long does a builder have to pay a progress claim in WA?
A subcontractor must be paid no later than 25 business days after making the claim, or sooner if the contract says so. A head contractor must be paid by the principal within 20 business days.
What if the builder doesn't send a payment schedule?
If no payment schedule arrives within 15 business days, the builder becomes liable for the full amount you claimed. You can recover it as a debt in court or through adjudication.
Can a builder hold my payment until they get paid?
No. Pay when paid clauses are void in WA. Your payment can't depend on the builder being paid under another contract.
Do I need a separate bank account for retention money in WA?
Yes, if you withhold retention on a contract over $20,000 including GST entered from 1 February 2024. It must sit in a bank account with "trust account" in its name, kept separate from your business money.
Related reading
- Do I have to pay super for my subbies?
- GST mistakes in construction
- Why Perth builders are going bankrupt
About the author
Colm Delaney, CA is a Chartered Accountant (CA ANZ) and founder of Reacco Chartered Accountants in Warwick, Perth, working exclusively with construction, trades and property businesses in WA.
General information only, correct as at 17 October 2026. This is not legal or tax advice. Security of payment disputes turn on the exact contract, so speak to a construction lawyer about a specific claim.