Payment Terms Legislation In Australia

The Payment Times Reporting Act 2020 was significantly amended by the Payment Times Reporting Amendment Act 2024 (commenced 7 September 2024). All companies with consolidated annual revenue of $100 million or more must report on their payment times and practices for small business suppliers. Groups must now produce consolidated reports across all subsidiaries. New Payment Times Reporting Rules 2024 replaced the 2020 rules. The scheme aims to improve transparency and incentivise faster payment to small businesses.

The Building and Construction Industry (Security of Payment) Act 2021 (WA) came into effect on 1 August 2022, replacing the Construction Contracts Act 2004. Payment terms are 20 business days for head contracts and 25 business days for subcontracts. Payment schedules must be provided within 15 business days. The Act applies to contracts entered into on or after 1 August 2022; the old Act continues to apply to pre-existing contracts.

The Business Council of Australia promotes the Australian Supplier Payment Code where members commit to pay suppliers within 30 days.

The Australian government policy RMG 417 requires all non-corporate commonwealth entities with compliant e-invoicing capabilities to pay e-invoices within 5 days and all other other small supplier invoices within 20 days, regardless of the size of invoice.

The Australian Small Business and Family Enterprise Ombudsman has investigated commercial payment terms to SMEs and proposed a 30 day maximum term. No law has yet been proposed, rather reporting requirements have been introduced.