Construction Act
What are the payment terms in a building contract?
Every payment cycle runs on four dates in a fixed order, each counted from the one before. Get the first one wrong and all of them move. Here is the sequence, who sets each date, and what fills the gap when your contract says nothing.
QScope Team·1 December 2025·5 min read
Payment on a construction job is not “30 days from invoice”. It is a sequence, and the sequence is the same on every job the Construction Act covers, even though the numbers differ contract to contract.
The sequence
1. Due date. The day the payment becomes due, usually a set number of days after a valuation date or an application. Everything else is counted from here, which is why it is not the day you get paid.
2. Payment notice. The payer must say what they consider due and on what basis, not later than five days after the due date (section 110A). Silence here starts the machinery described in what to send when they never reply.
3. Pay less notice. The one lawful way to pay less than the notified sum, and it must arrive a set period before the final date (section 111). Read that period in your contract, because the Act does not set it: it is whatever the parties agreed.
4. Final date for payment. The last day the money can lawfully arrive. Miss it and the remedies start: interest, and on non-domestic jobs suspension on seven days notice.
Who sets each number
- The contract sets the due date mechanism, the final date, and the pay less period.
- The Act caps the payment notice at five days after the due date.
- The Scheme for Construction Contracts fills the gaps where the contract is silent or non-compliant (section 110(3)): it supplies the due date mechanism, a 17-day final date and a 7-day pay less period, in its England and Wales version.
On a job for someone living in the house
The Act, and with it this whole sequence, does not apply to a contract with a residential occupier (section 106). There, the payment terms are exactly what your contract says and nothing more, which is the strongest argument for writing them down before you start: on that job there is no Scheme waiting behind the paper to fill a silence.
What to do this week
1. Write down the four periods from your contract particulars. Ten minutes, once per job.
2. Put the final date for the current cycle in the calendar. It is the only date on this page that is about money arriving.
3. When a date is missed, act in the same cycle. Interim payments are cumulative, and a position defended a month late is a position given away.