Tendering and estimating, 29 October 2026
Main contractor payment terms: 30, 60 or 90 days and what to accept
There is no fixed legal payment term for subcontracts in England and Wales. The Construction Act lets you and the main contractor agree the dates, but the contract must say when each payment falls due and give a final date for paying it. If it doesn't, the statutory Scheme fills the gap: due 7 days after the period ends, final date 17 days later.
What payment terms do main contractors use?
Most subcontracts run on monthly valuations, with a final date for payment somewhere between 30 and 60 days after the due date. Some tier-one contractors ask for longer. The law doesn't set the number of days, so the figure in the contract is the figure you live with.
What the law does require, under section 110 of the Housing Grants, Construction and Regeneration Act 1996, is an "adequate mechanism" for working out what is due and when, plus a final date for payment. The parties can agree the gap between the due date and the final date. If the contract leaves those out, the relevant parts of the Scheme for Construction Contracts apply instead.
Read the payment clause before you price. A 90-day term on a three-month job means you fund the whole job yourself, and that cost belongs in the rate.
What happens if the contract doesn't say?
The Scheme gives you a default timetable. Payment falls due on the later of 7 days after the end of the payment period or the date you make your claim. The period is 28 days if the contract doesn't name one. The final date is 17 days after the due date.
A monthly application under the Scheme defaults
A groundworks subcontractor applies for £42,000 for work up to 31 March. The contract sets monthly periods but no payment dates, so the Scheme fills those in.
| Period ends and application sent31 March | 31 Mar |
| Payment falls duelater of 7 days after period end, or the claim | 7 Apr |
| Payer's payment notice duewithin 5 days of the due date | 12 Apr |
| Last day for a pay less noticeat least 7 days before the final date | 17 Apr |
| Final date for payment17 days after the due date | 24 Apr |
The Scheme also covers short jobs. The right to stage payments in section 109 doesn't apply where the contract says, or the parties agree, the work will take under 45 days. Then the whole price falls due 30 days after you finish, or when you claim, whichever is later.
For how payment and pay less notices work in practice, see pay less notice template.
Can a main contractor make you wait until they get paid?
No, with one exception. Section 113 of the Act makes a clause that ties your payment to the main contractor receiving money from someone else ineffective, unless that third party is insolvent. The same goes for clauses that make payment depend on work under another contract being done or certified, under section 110(1A).
Watch for wording that does the same thing without the words "pay when paid". "Payment will be made within 30 days of receipt of payment from the Employer" is a conditional payment clause. "Payment will be made 30 days after the main contract certificate" ties your money to another contract's certificate.
Sections 110 and 113 strike this kind of condition out. The Scheme's payment rules apply in its place. Get advice before you rely on it in a dispute.
The Act allows pay-when-paid where the payer up the chain is insolvent. Speak to a solicitor or insolvency practitioner.
The contract dates apply. Price the wait into your rate and diary the notice deadlines.
Where the contract has no adequate mechanism or final date, the Scheme's 7 day and 17 day defaults apply.
Are 60 or 90 day terms legal?
Often, yes, if you signed up to them. The Late Payment of Commercial Debts rules let businesses agree a payment period over 60 days only where it is expressly agreed in the contract and not grossly unfair to the supplier. If no date is agreed at all, a payment becomes late 30 days after the customer receives your invoice or you finish the work, whichever is later.
Public sector work is tighter. Since 24 February 2025, public contracts include a 30-day payment term that runs down to qualifying subcontracts, measured from receipt of the invoice.
The Commercial Payments Bill, introduced in the House of Lords on 19 May 2026, would set a 60-day cap when large firms pay smaller suppliers, make interest at 8% above base rate mandatory and ban retentions in construction contracts. The Lords finished with it on 20 October 2026 and it has gone to the Commons. Until it becomes law and a start date is set, your contract terms stand. For the retentions side, see retentions in construction.
What do 30, 60 or 90 days cost you?
Each extra 30 days of terms means carrying another month of wages, materials and plant before the money arrives. On a steady subcontract that cash comes out of your overdraft or your own pocket.
Take a commercial groundworks firm we spoke to: seven staff, four or five subbies, about £1m a year, mostly subcontract work for main contractors. The owner told us "I'm doing it all on pen and paper", including the CIS deductions. Say a month of work on one main contractor costs the firm £40,800 to deliver.
| Final date after month end | Cash you carry |
|---|---|
| 30 days | £40,800 |
| 60 days | £81,600 |
| 90 days | £122,400 |
Moving from 30 to 90 days means finding another £81,600 to fund the same work. That is the number to put in front of the main contractor when you negotiate, or into your price if you can't.
Your numbers, not a promise. Change any figure to match your firm.
What should you check before you sign?
Check the payment clause the same way you check the drawings: before the price goes in, not after the job starts. Mark up anything you can't live with in your tender return, as a qualification. See tender qualifications and exclusions for wording.
What can you do if they pay late?
If the notified sum isn't paid by the final date, section 112 lets you suspend some or all of the work after giving at least seven days' written notice, stating your grounds. The time you are off site is added to your contract period, and you can claim reasonable costs of the suspension. You can also refer the dispute to adjudication at any time under section 108, with a decision due within 28 days of referral.
For the interest you can add, use late payment interest. For the chasing itself, see how to chase an unpaid invoice.
The Construction Act's payment rules don't apply to work for a homeowner on the house they live in. Scotland has its own version of the Scheme. If a large sum is at stake, or you are thinking of suspending, speak to a construction solicitor first.
Where Nexley fits
Nexley is the AI back office for UK trade firms: five AI assistants run your tenders, quotes, buying, scheduling and invoicing. It connects to the tools you already work in, you run it all from WhatsApp, and you approve everything. £799 a month.
When a tender pack arrives, Nexley reads the subcontract and pulls out the payment period, application dates, final date, retention and any pay-when-paid wording, then flags anything that differs from the Scheme before you price. You see the summary on WhatsApp and decide what to qualify; nothing goes back to the main contractor until you approve it.
Common questions
What is a normal payment term for a subcontractor in the UK?
Monthly applications with a final date 30 to 60 days after the due date are common, but the law doesn't set a standard. If the contract has no dates, the Scheme gives due 7 days after the period ends and a final date 17 days later.
Is "pay when paid" illegal?
It isn't a crime, but under section 113 of the Construction Act such a clause is ineffective unless the payer further up the chain is insolvent. The Scheme's payment rules then apply in its place.
Does the 60-day cap apply to construction now?
Not yet. The Commercial Payments Bill would cap terms at 60 days when large firms pay smaller suppliers, but as of October 2026 it is still going through Parliament. Today, terms over 60 days are allowed if expressly agreed and not grossly unfair.
Can I stop work if the main contractor doesn't pay?
Yes, if a sum due isn't paid by the final date and no valid pay less notice was given. You must give at least seven days' written notice of your intention to suspend and the grounds for it.
Sources
- legislation.gov.uk: Housing Grants, Construction and Regeneration Act 1996, section 110
- legislation.gov.uk: Housing Grants, Construction and Regeneration Act 1996, section 113
- legislation.gov.uk: Scheme for Construction Contracts (England and Wales) Regulations 1998, Part II
- legislation.gov.uk: section 112, right to suspend performance
- legislation.gov.uk: section 108, adjudication
- legislation.gov.uk: section 106, residential occupiers
- GOV.UK: Late commercial payments, when a payment becomes late
- legislation.gov.uk: Late Payment of Commercial Debts Regulations 2013
- GOV.UK: Prompt payment policy
- GOV.UK: Largest crackdown on late payments as Bill enters Parliament
- UK Parliament: Lords completes examination of Commercial Payments Bill
Every rule, rate and date above was checked against these sources on the date shown at the top.
Topic: Tendering and estimating
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