Pay on time policy

Supplier pay on-time or pay interest policy

This resource management guide takes effect from 1 July 2014 and replaces Finance Circular 2012/02: Procurement On-Time Payment Policy for Small Business.

Non-corporate Commonwealth entities are required to agree to payment terms that provide payment no later than 30 days after the date of receipt by the entity from the supplier for contracts valued up to and including A$1 million (GST inclusive).

Where payment is not made within the maximum payment terms, the non-corporate Commonwealth entity is to pay interest to the supplier where the amount accrued is more than A$100 (GST inclusive).

Please note that on 22 November 2017, the Government responded to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Payment Times and Practices Inquiry Report.

The Government has agreed to mandate a 20 calendar day payment time (reduced from 30 days) for non-corporate Commonwealth entities for contracts valued up to A$1 million, effective from 1 July 2019.

Finance will be revising RMG-417 closer to implementation of the change.

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Additional Information

Contact for information on this page: procurementagencyadvice@finance.gov.au  

Last updated: 05 December 2017