Progress Payments in NSW: The Complete Guide for Builders
Progress payments are the cashflow lifeline of every residential build. Get them wrong and you're chasing money, delaying trades, and straining client relationships. Get them right and projects flow smoothly from slab to handover.
This guide covers everything NSW builders need to know.
The Standard Payment Stages
The Home Building Act 1989 (NSW) and the Home Building Regulation 2014 set out the maximum progress payment percentages for residential work over $20,000:
| Stage | Maximum % | Description | |-------|-----------|-------------| | Deposit | 10% (or $20,000, whichever is less) | Upon signing the contract | | Base | 10% | Completion of the base (slab or footings) | | Frame | 15% | Structural frame erected and braced | | Enclosed / Lock-up | 35% | Roof on, external walls complete, doors and windows fitted | | Fixing | 20% | Internal linings, architraves, doors, built-in shelves | | Completion | 10% | Practical completion achieved |
Important: These are maximum percentages. Your contract can specify less at any stage, but never more.
Deposit Rules
The deposit is the most regulated stage:
- Capped at 10% of the contract price or $20,000, whichever is less
- Must be held until work commences
- HBCF insurance certificate must be provided to the homeowner before accepting the deposit
- Taking a deposit above the legal limit is an offence
When Can You Claim?
You can issue a progress claim when the work described for that stage is substantially complete. "Substantially" means the work is done to the point where remaining items are minor and don't prevent the next stage from starting.
What to Include in a Progress Claim
- The contract reference and stage name
- A description of work completed
- The dollar amount being claimed
- Any approved variations since the last claim
- Supporting evidence (photos, inspection certificates)
Payment Timeframes
Under the Building and Construction Industry Security of Payment Act 1999 (NSW):
- Payment is due within 15 business days of the claim being served
- If the client disputes the claim, they must issue a payment schedule within 10 business days
- Failure to respond = the claimed amount is owed in full
HBCF Insurance Requirements
Before claiming any payment (including the deposit), ensure:
- Your HBCF certificate is current and covers the contract value
- A copy has been provided to the homeowner
- The certificate number is recorded in your project file
HBCF is mandatory for all residential work over $20,000 in NSW. Building without it is a criminal offence.
Common Cashflow Mistakes
1. Claiming Too Late
Don't wait weeks after completing a stage to issue your claim. The sooner you claim, the sooner you get paid.
2. Incomplete Documentation
Missing photos or inspection certs give clients a reason to delay payment. Document as you go.
3. Not Tracking Variations
Approved variations should be included in the next progress claim. If you don't track them, you'll forget to invoice them.
4. Poor Communication
A surprise invoice creates friction. Keep clients informed about upcoming payment stages well before the claim arrives.
5. Manual Tracking
Spreadsheets and paper claims are slow and error-prone. One missed variation or miscalculated percentage can cost thousands.
Digital Progress Payment Management
Modern builders are moving to digital tools that:
- Auto-calculate claim amounts based on contract percentages
- Track variations and include them in the right claim
- Generate professional progress claims with supporting photos
- Send claims digitally with read receipts
- Track payment status across all projects
Paperless is pre-configured for NSW progress payment stages. Contract percentages auto-calculated, variations linked to the correct claim, photo evidence attached, and payment tracking across all projects. Start a free 30-day trial and take control of your cashflow.