If you are an Ontario electrician, plumber, or HVAC tech and a customer is dragging out payment for 60, 90, or even 120 days, that is not just rude. It may be illegal. The Ontario Construction Act gives you a hard legal right to be paid within 28 days of sending a proper invoice.
Most contractors have heard the phrase “prompt payment” without knowing what it actually does for them. This guide explains the rule in plain language: how the 28-day clock works, what your invoice must say to start it, and what you can do when a customer ignores the deadline.
The catch (there is always a catch): the 28-day protection only kicks in if your invoice qualifies as a proper invoice under the Act. Most trade invoices from Word templates or basic accounting software are missing at least one required field. Keep reading.
How prompt payment actually works
Ontario’s prompt-payment rules became law on October 1, 2019. They apply to almost every construction contract in the province, including work done by trades contractors. Here is the basic chain:
- You send a proper invoice to the owner or general contractor. The moment they receive it, the clock starts.
- The payer has 14 daysto dispute the invoice in writing using a Notice of Non-Payment (Form 1.1). If they don’t send a valid notice within 14 days, they cannot dispute it later. (Note: a separate deficiency notice, used when the invoice itself isn’t compliant, has a shorter 7-day window as of January 1, 2026. Don’t confuse the two. See the 2026 changes article for the full breakdown.)
- Payment must arrive within 28 days of the invoice. No exceptions, no verbal extensions.
- If you are a subcontractor, your GC must pay you within 7 days of receiving payment from the owner. The obligation flows down the payment chain.
- If payment is late, interest accrues automatically at the greater of the Courts of Justice Act pre-judgment interest rate or the rate in your contract. You do not need to write a demand letter or wait for a court order to earn that interest.
- If there is a genuine dispute that cannot be resolved, either party can refer it to a fast-track adjudicator through ODACC, the body created by the Act for exactly this purpose.
That is the whole system. The rules are surprisingly simple once you see the timeline laid out. The hard part is making sure your invoice actually qualifies. For a deeper look at the full system including the seven required proper-invoice fields, see the Ontario Construction Act prompt payment guide.
What makes an invoice “proper” (and why it matters)
The Ontario Construction Act defines a proper invoice precisely. An invoice that is missing any required element is not a proper invoice, and the 28-day payment clock never starts. The payer can send it back, you fix it, and the clock resets from zero. This is the most common reason trade contractors wait three months to get paid: they sent an invoice that did not start the clock in the first place.
Under the Act, a proper invoice must include, at minimum:
- Your name and address as the contractor or subcontractor.
- The invoice date and the period during which the services or materials were supplied.
- A contract reference sufficient to identify the specific contract, such as a contract number, job address, or purchase order number.
- A description of the work performed, including quantities where relevant.
- The amount claimed and the payment terms.
- Where to send payment: name, title, mailing address, and telephone number of the person or office receiving the cheque (or e-transfer).
Contracts can add extra requirements on top of these minimums, as long as payment is not made conditional on owner approval or payment certification (both of which are explicitly prohibited under the Act).
The most common missing fields for trades contractors are the period of work (a date range like “March 4–14, 2026”) and the contract reference (job address or contract date). A bare invoice that says “Electrical work: $4,200 + HST” with no job address or date range is not a proper invoice under the Act.
A compliant invoice looks more like: “Electrical work, panel upgrade at 412 Lakeshore Rd., Burlington, per contract dated March 3, 2026. Work performed March 4–14, 2026. Labour and materials as per attached schedule. Subtotal $4,200 + HST (BN 123456789 RT0001) $546 = Total $4,746. Payment to: [your name, address, phone].”
See the dedicated guide on proper invoice requirements for a full checklist with examples.
Day-by-day breakdown of a 28-day cycle
Once your proper invoice goes out, here is how the next 28 days should run. Print this and tape it to your dashboard until it becomes second nature.
What happens if they don’t pay on day 28
You have two tools: statutory interest and adjudication through ODACC.
Statutory interest
Interest begins accruing the day after the payment deadline passes. The rate is the greater of the pre-judgment interest rate set under the Courts of Justice Act or the rate in your contract. You do not need to do anything to earn it. When you eventually get paid (voluntarily or after adjudication), you are owed the principal plus that interest from day 29 onward.
Most contractors do not realize they can claim this interest. Most payers know that contractors do not claim it. Referencing it explicitly in your written demand changes the dynamic.
Adjudication through ODACC
If a payer refuses to pay and you cannot resolve the dispute directly, you can refer it to ODACC (Ontario Dispute Adjudication for Construction Contracts). Adjudication is faster and cheaper than most contractors expect:
- $0 in ODACC fees when the amount claimed is under $50,000.
- For claims of $50,000 or more, ODACC charges two fees: a Referral Fee of $600 + HST (paid by the claimant only, not split) and a Certification Fee of $120 + HST (split equally between parties at the end). Confirm current rates at odacc.ca/en/claimants/fees.
- A decision is typically rendered within 30 days of the date you submit your documents to the adjudicator (not from the original filing date, which is a few days earlier).
- You do not need a lawyer to file, though legal help is worth it on larger claims.
- The decision is binding and enforceable like a court judgment.
For more on how adjudication works step-by-step, see the separate guide on ODACC adjudication for contractors.
| Your option | Cost | Timeline |
|---|---|---|
| Claim statutory interest in your demand | $0 | Immediate: starts accruing automatically |
| ODACC adjudication (under $50K) | $0 referral fee + adjudicator fee | ~30–35 days to decision |
| ODACC adjudication ($50K+) | $600 + HST referral fee + adjudicator fee | ~30–35 days to decision |
| Construction lien | Legal fees + court filing | Several months |
| Small claims court | $102–$250 filing fee | Several months to a year |
Three mistakes that void your prompt-payment protection
1. Sending an invoice that is missing a required field
An invoice missing any proper-invoice element does not start the 28-day clock. The payer sends it back with a deficiency notice, you issue a corrected invoice, and the clock restarts from zero. Contractors lose weeks (sometimes months) on collections this way without ever knowing why. Fix your template once and you never hit this problem again.
2. Accepting a verbal promise to pay next week
“We’ll sort it out after the holiday” is not a valid extension under the Act. If you agree to wait without getting anything in writing, you risk waiving your right to automatic interest. Any extension of time should be confirmed in writing. A text message with a specific date is better than nothing.
For more on what to do when a customer claims they need more time, see the guide on late payment penalties and interest in Canada.
3. Waiting too long and missing your lien deadline
The Ontario Construction Act gives you the right to register a construction lien on a property as security for unpaid amounts. But the lien deadline is strict: 60 days from the last day you supplied services or materials. Miss that date and the right is gone permanently, even if the customer still owes you money.
Do not wait for the full 28-day payment cycle to expire before checking your lien deadline. The two clocks run at the same time. If the work finished 45 days ago and you still have not been paid, you have 15 days left to register a lien before that option disappears. See the lien deadline glossary entry for province-by-province deadlines.
Your get-paid-faster checklist
None of this requires a lawyer or a new software stack. These five steps will get you most of the way there starting this week.
- Audit your invoice template today. Does it include a work period, a contract reference (job address or contract date), your full contact details, and the total amount with HST separately stated? These are the fields most often missing.
- Send invoices by email and request a read-receipt, or use a platform that timestamps delivery. You need to prove the date the invoice was received to establish when the 28-day clock started.
- Set two calendar reminders per invoice: day 7 (did a dispute notice arrive?) and day 28 (is payment in your account?). Put them in your phone the same day you send the invoice.
- Know your lien deadline. Count 60 days from the last day you supplied work or materials on each project. Write it down. Do not rely on memory.
- Bookmark ODACC at odacc.ca. Know where to file before you ever need to. Most customers will pay the moment they see you know where to escalate.
This article is for general information only and does not constitute legal advice. Construction Act rules can vary based on your specific contract and situation. For advice specific to your case, consult a construction lawyer licensed in Ontario.