Security of payment in Queensland: BIF Act guide for builders and subbies

TL;DR

Queensland’s Building Industry Fairness (Security of Payment) Act 2017 (the BIF Act) covers all construction contracts in Queensland except owner-occupier residential (where the homeowner lives or intends to live in the property). Subcontractors on residential jobs are still covered. Respondents have 15 business days to serve a payment schedule or the full claimed amount falls due. When a payment dispute goes to adjudication, the QBCC runs the process: standard claims under $750,000 get a determination within 10 business days of the response date. Project trust accounts are now compulsory for eligible contracts (QLD government contracts $1m+, private sector $10m+), protecting subcontractor payments in a ring-fenced account. The biggest risk for builders is missing the payment schedule window: if no schedule is served in time, you cannot dispute the amount in adjudication.

In plain English

The BIF Act gives builders and subbies in Queensland a fast, low-cost way to recover unpaid progress payments without going to court. It sits alongside the building contract, not instead of it: if a client or head contractor disputes a payment, the Act provides the enforcement pathway.

Key components:

Payment claims: a written request for payment that triggers the Act’s protections
Payment schedules: the respondent’s written response, either paying or setting out disputed amounts with reasons
Adjudication: fast-track resolution by the QBCC if the payment schedule is short or no payment is made
Project trust accounts (PTA): mandatory ring-fenced accounts on eligible contracts to protect payment down the subcontractor chain
Retention trust accounts (RTA): ring-fenced retention money on contracts where a PTA is required

What it requires

Payment claims (s 68)

A valid payment claim under the BIF Act must:

Identify the construction work or related goods and services being claimed
State the amount claimed
Request payment of that amount

A document bearing the word “invoice” is taken to request payment (verified 2026-05-09, Building Industry Fairness (Security of Payment) Act 2017 (QLD)).

Head contractors must include a supporting statement with every payment claim when subcontractors are engaged. The statement must declare either that all subcontractors have been paid in full, or list unpaid subcontractors and the reasons for non-payment. Omitting it, or providing false or misleading information, carries a maximum penalty of 100 penalty units ($16,690 at the current QLD penalty unit rate of $166.90, effective 1 July 2025, verified 2026-05-09, Queensland Penalties and Sentences Regulation 2025).

Time to serve a payment claim (s 75): A payment claim must be served before the end of whichever period is longer: the period specified in the contract, or 6 months after the work was last performed or goods last supplied. Final claims may be made up to 28 days after the defects liability period ends, or 6 months after project completion.

Reference dates (s 67): A payment claim can only be served on or from a reference date. The reference date is: the date specified in the contract for progress claims, or the last day of the month in which the work was performed if the contract is silent. Only one claim per reference date is permitted (verified 2026-05-09, QBCC: Payment protection laws).

Payment schedule obligations (s 69)

When a respondent (client or head contractor) receives a payment claim, they must within the earlier of:

The timeframe set out in the contract, or
15 business days of receiving the payment claim

either pay the full amount or serve a written payment schedule. The schedule must:

Identify the payment claim it responds to
State the amount proposed for payment (the “scheduled amount”)
Explain why any amount less than the claimed amount is proposed

Failure to serve a payment schedule within the 15-business-day window makes the full claimed amount due and payable. The respondent loses the right to contest the amount in adjudication. A separate offence penalty of up to 100 penalty units ($16,690) applies for failing to pay the scheduled amount by the due date (verified 2026-05-09, QBCC: Payment protection laws).

Payment due dates (s 67U-67W Queensland Building and Construction Commission Act 1991)

Claimant	Maximum payment term	Default (contract silent)
Head contractor (from principal)	15 business days from claim	10 business days
Subcontractor (from head contractor)	25 business days from claim	10 business days

“Pay when paid” clauses are void and unenforceable in Queensland (verified 2026-05-09, Holding Redlich: Security of Payment QLD).

Adjudication (s 79-90)

If the respondent serves a payment schedule for less than the claimed amount, or if no schedule is served and no payment is made, the claimant may apply to the QBCC Registrar for adjudication.

Application windows:

Scenario	Application window
Payment schedule received underpaying	30 business days from receiving the schedule
Scheduled amount not paid by due date	20 business days after the due date
No payment schedule served, no payment made	30 business days after the later of: the due date, or the last day to issue a schedule

Adjudication tracks by claim size:

Track	Claim size	Response deadline	Determination deadline
Standard	Under $750,000 excl. GST	10 business days from application (or 7 from adjudicator acceptance)	10 business days after response date
Complex	$750,000+ excl. GST	15 business days from application (or 12 from adjudicator acceptance)	15 business days after response date (extendable by up to 15 further days)

Enforcement: The respondent must pay the adjudicated amount within 5 business days of receiving the determination, or by the later date set by the adjudicator. Adjudication decisions are enforceable as court judgments (verified 2026-05-09, Holding Redlich: Security of Payment QLD).

Project trust accounts (s 51-66, Part 2 BIF Act)

Project trust accounts are mandatory ring-fenced bank accounts for eligible construction contracts. Money deposited into a PTA can only be used to pay the subcontractors working on that project, not for general business expenses.

Threshold: when a PTA is required:

Contract counterparty	Contract value threshold
Queensland State Government or Hospital and Health Service	$1 million or more (excl. GST)
Private sector, local government, statutory authority, government-owned corporation	$10 million or more (excl. GST)

Residential exclusion: Contracts for small-scale residential construction work on dwellings with 1 or 2 living units are excluded from PTA requirements, regardless of contract value. Residential developers building 3 or more living units must assess against the thresholds (verified 2026-05-09, QBCC: Trust account rollout).

Other exclusions:

Contracts solely for professional design, advisory, or contract administration work
Contracts where less than 90 days remain between the trigger date and practical completion
Contracts limited to maintenance, testing, or preventing deterioration
Subcontracts (generally exempt unless the subcontractor and head contractor are related entities)
Contracts where project trust work makes up 50% or less of the total contract value

Retention trust accounts (RTA)

A retention trust account is required when:

The head contract requires a project trust account, AND
Cash retentions are withheld from a contracted party, AND
The party holding retentions is a head contractor or principal (Queensland state, Commonwealth, and local government entities are exempt from the RTA requirement)

Retention money held in an RTA is protected from insolvency of the holding party (verified 2026-05-09, QBCC: Trust accounts).

What it doesn’t cover

Owner-occupier residential contracts (s 11): The BIF Act does not apply to a contract for domestic building work where the owner is a party to the contract and lives in, or intends to live in, the building. This is the principal residential exclusion. However, subcontractors engaged by the builder on that residential project are still covered by the Act for their claims against the head contractor.

Purely professional services: Contracts solely for design, advisory, or contract administration work are excluded from the trust account provisions.

Maintenance-only contracts: Contracts limited to testing, sampling, and preventing deterioration are excluded.

Practical implications

For head contractors:

Always serve a written payment schedule within 15 business days if you do not intend to pay the full amount claimed. Missing this window costs you the ability to contest the claim in adjudication.
Include a supporting statement with every payment claim to subbies. An omission exposes you to a $16,690 penalty and may make your claim defective.
If your contract requires a PTA, open the account before the first payment is made. First prosecution under the BIF Act resulted in a $150,000 fine for a developer who failed to establish a PTA (verified 2026-05-09, Lexology: Developer fined $150,000 for Project Trust Account offences).

For subcontractors:

Check your contract for reference dates. If the contract is silent, claims can be made on the last day of each month.
Apply for adjudication within the window: 30 business days is the standard. Missing it is fatal for that reference period.
On PTA contracts, your payments must flow through the trust account. If the head contractor attempts to pay you from outside the account, that is a breach of the Act.

For clients (principals) on commercial work:

If you receive a payment claim and the amount is disputed, serve a payment schedule within 15 business days. No schedule means the full amount is due.
“Pay when paid” clauses are unenforceable in Queensland. Payment obligations to subcontractors are independent of whether you have been paid by your client.

References

Building Industry Fairness (Security of Payment) Act 2017 (QLD) (verified 2026-05-09)
QBCC: Payment protection laws (verified 2026-05-09)
QBCC: Trust account rollout (verified 2026-05-09)
QBCC: Trust accounts overview (verified 2026-05-09)
Queensland Penalties and Sentences Regulation 2025 (penalty unit: $166.90 from 1 July 2025) (verified 2026-05-09)
Holding Redlich: Security of Payment QLD legal guide (verified 2026-05-09)
Lexology: Developer fined $150,000 for Project Trust Account offences (verified 2026-05-09)
Department of Housing and Public Works: Trust account framework (verified 2026-05-09)