NZ Construction Contracts Act Payment Claim & Payment Schedule Guide for Tradies (2026–27)

Short answer: Serving a valid payment claim Construction Contracts Act NZ (CCA 2002 Section 20) triggers strict statutory “pay now, argue later” rights for Kiwi builders, plumbers, sparkies, and subcontractors. Every CCA payment claim must be in writing, identify the construction work and period it relates to, state the claimed amount and due date, show how the figure was calculated, state that it is made under the Act, and attach the prescribed Form 1 notice — forcing the payer to either pay in full or serve a written Section 21 Payment Schedule by the due date.

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In New Zealand construction, sending an ordinary invoice without the mandatory statutory wording of the Construction Contracts Act 2002 (CCA) leaves a tradie exposed when a main contractor or residential homeowner stalls payment. Since the 2015 CCA amendments removed the old distinction between commercial and residential contracts for payment claims and adjudication, every residential and commercial construction contract in New Zealand is covered by the Act’s default payment regime.

Below is the complete 2026–27 New Zealand guide to drafting a compliant payment claim Construction Contracts Act NZ (Section 20), responding with or enforcing a Payment Schedule (Section 21), and combining your CCA payment claim with Inland Revenue (IRD) Taxable Supply Information (TSI) so one PDF serves as both a statutory payment claim and a 15% GST tax invoice. For related Kiwi tradie guides, see how to invoice as a contractor in NZ, NZ tradie variations and retentions, and NZ quote template.

What must a valid payment claim Construction Contracts Act NZ (Section 20) include?

Under Section 20 of the Construction Contracts Act 2002, an invoice or progress claim only activates the Act’s statutory enforcement remedies (statutory debt recovery under Section 23 and right to suspend work under Section 24A) if it meets all seven requirements:

CCA Section 20 Requirement	What Must Appear on Your NZ Tradie Invoice / Claim	What Happens If You Leave It Off
1. In writing (s 20(2)(a))	A written PDF or paper document served on the payer	Verbal payment demands cannot trigger CCA default liability
2. Identify the construction work & period (s 20(2)(b)–(c))	Site address, contract/job reference, and the exact start and end dates the work covers (e.g., Progress Claim #2: Framing & Roof Truss Install, 1–31 Oct 2026)	Payer can dispute the claim as invalid for failing to specify the work period
3. State the claimed amount & due date (s 20(2)(d))	Clear subtotal, 15% GST (if registered), total $NZD claimed, and the exact payment due date (default is 20 working days after service if the contract has no written payment terms)	Without a stated due date, the statutory Section 22 default clock is harder to enforce
4. Indicate how the payee calculated the amount (s 20(2)(e))	Itemised breakdown: quoted contract stage %, labour hours × rate, materials, plus approved written variations and less prior payments/retentions	Lump-sum “For work done: $15,000” claims are routinely struck down for lacking a calculation breakdown
5. State that it is made under the Act (s 20(2)(f))	Exact sentence printed on the face of the invoice: “This is a payment claim made under the Construction Contracts Act 2002.”	Critical: Without this sentence, the document is only a standard invoice, not a CCA payment claim
6. Attach Form 1 Information Notice (s 20(3))	Mandatory on all payment claims: attach Form 1 of the Construction Contracts Regulations 2003 outlining the payer’s rights and obligations	Omitting Form 1 invalidates the payment claim across both residential and commercial jobs

How does the “Pay Now, Argue Later” (Section 21 & Section 22) clock work?

Once you serve a valid Section 20 Payment Claim (with Form 1 attached), the payer (main contractor, developer, or homeowner) cannot simply ignore your invoice. Under Sections 21 to 24A of the CCA, the legal clock runs as follows:

1. Step 1 — Payment Claim Served (Day 0): You email or deliver your combined Payment Claim / GST Tax Invoice + Form 1 Notice.
2. Step 2 — Payer Must Serve a Payment Schedule or Pay (By the Due Date / Default 20 Working Days):
   • If the payer agrees with your claim, they pay the claimed amount in full by the due date.
   • If the payer disputes all or part of your claim, they must serve a valid written Payment Schedule (Section 21) before the due date stating the scheduled amount they propose to pay, how they calculated it, and their specific reasons for withholding the difference, and pay the undisputed scheduled amount by the due date.
3. Step 3 — What If the Payer Sends No Payment Schedule and Doesn’t Pay (Section 22 Statutory Debt)?
   • Under Section 22, if the payer fails to serve a valid Payment Schedule within the time allowed and fails to pay by the due date, the entire claimed amount becomes a statutory debt due (Section 23).
   • In court recovery proceedings for a Section 23 debt, the payer is barred from raising counterclaims or set-offs about alleged defects (they must pay first and adjudicate separately).
   • You may also serve a 5-working-day written notice of intention to suspend work (Section 24A).

How do you combine a CCA Payment Claim with IRD Taxable Supply Information (TSI)?

You do not need to send two separate documents (one Payment Claim and one GST Invoice). Under the Goods and Services Tax Act 1985 (s 19E–19K), a single document acts as both a CCA Section 20 Payment Claim and valid IRD Taxable Supply Information (TSI) when it includes:

Threshold (Incl. 15% GST)	Required IRD TSI Fields + CCA s 20 Fields on One Document
Up to $200 incl. GST	Your name/trading name, date of issue, description of construction work, total consideration, and CCA Section 20 statement + Form 1
$200.01 to $1,000 incl. GST	All of the above plus your IRD GST registration number (XXX-XXX-XXX) and a clear breakdown showing either the 15% GST amount or that the total includes 15% GST
Over $1,000 incl. GST	All of the above plus the recipient’s name and contact/site details and the itemised quantity/calculation of the construction supply

Cash-flow tip for Kiwi tradies: If your annual turnover is $2 million or less (excl. GST), make sure your myIR GST account is set to the Payments Basis (Cash Basis). That way, serving a $23,000 CCA Payment Claim does not trigger a $3,000 GST bill to IRD until the client actually pays the claim.

Copyable CCA Section 20 footer for your Kiwi tradie invoice

Add this block to the notes/terms footer of your construction invoice template (and attach the prescribed MBIE Form 1 sheet):

PAYMENT CLAIM NOTICE (CONSTRUCTION CONTRACTS ACT 2002)
This is a payment claim made under section 20 of the Construction Contracts Act 2002.
Work Period Covered: [Start Date] to [End Date] · Site: [Job Address]
Due Date for Payment or Payment Schedule: [Due Date]
Please see the attached Form 1 (Information That Must Accompany All Payment Claims)
for your statutory obligations under sections 21–24A of the Act.

How to track NZ construction progress claims, variations, and retentions in Keel

Keeping every quoted stage, signed variation email, progress payment claim, and retention release date under a single job folder in Keel ($0/mo Core on iPhone & iCloud Web Workspace) ensures that your Section 20 calculation breakdown and your 7-year Inland Revenue (IR3 + GST101A) audit trail stay 100% aligned without linking a bank feed.

Frequently asked questions

Is a tax invoice the same as a payment claim under the Construction Contracts Act NZ?

A standard tax invoice only becomes a valid payment claim under the Construction Contracts Act 2002 if it meets all Section 20 requirements—including stating the construction period, showing how the amount was calculated, printing the sentence “This is a payment claim made under the Construction Contracts Act 2002”, and attaching the prescribed Form 1 notice.

Do residential jobs need Form 1 attached to a payment claim in New Zealand?

Yes. Since the 2015 reforms to the Construction Contracts Act 2002 (s 20(3)), Form 1 (Information that must accompany all payment claims) must be attached to every payment claim in New Zealand, whether the client is a commercial head contractor or a residential homeowner.

How many days does a client have to respond to a CCA payment claim in NZ?

If your written construction contract specifies a due date for Payment Schedules and payment, that contract date applies. If there is no written provision, Section 18 and Section 22 of the CCA set the default deadline at 20 working days after the payment claim is served.

What happens if a client disputes my invoice by phone but sends no written Payment Schedule?

A phone call does not satisfy Section 21 of the Construction Contracts Act 2002, which requires a Payment Schedule to be in writing, state the scheduled amount, and explain the reasons for any difference. If no written Payment Schedule is served before the deadline, the full claimed amount becomes recoverable as a statutory debt under Section 23.

Can I charge 15% GST on retentions held back on a CCA payment claim?

Under Section 9(3)(aa) of the Goods and Services Tax Act 1985, even if you account for GST on the Invoice (Accrual) basis, GST on construction contract retentions is only triggered at the earlier of when the retention money is actually paid or an invoice is issued specifically for the retention release. On the Payments Basis, GST is always paid only when the cash arrives.

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This guide is general information based on the New Zealand Construction Contracts Act 2002 (MBIE) and the Goods and Services Tax Act 1985 (Inland Revenue) for 2026–27 and is not legal or tax advice. Consult building.govt.nz, ird.govt.nz, or a New Zealand construction lawyer or accountant.