The Ontario Construction Act’s 28-Day Rule: How the Payment Clock Works for Contractors

Ontario’s Construction Act 2017 quietly handed every electrician, plumber, HVAC tech, and general contractor in the province a powerful tool most have never used: a hard legal right to be paid within 28 days of sending a compliant invoice.

The problem is that the 28-day clock only starts when your invoice qualifies as a “proper invoice” under the Act. Send an invoice that is missing even one required field and the payer can issue a deficiency notice, the clock resets to zero, and you are back to waiting indefinitely. Most Word templates and US-built accounting tools miss at least one required element.

This guide explains the rules in plain language, without legal jargon, so you can start using them this week. It covers what makes an invoice proper, how the 28-day clock works, what the 14-day dispute window means for you, what happens when a customer does not pay, and why most invoicing software built in the US does not meet Ontario’s standard.

What is a “proper invoice”?

Section 6.1 of the Ontario Construction Act defines a proper invoice precisely. An invoice that is missing any required element is not a proper invoice. The payer can reject it with a deficiency notice and the 28-day clock never starts.

Critically, a payer who receives a deficient invoice must issue a deficiency notice within 7 days (a change introduced January 1, 2026). After that 7-day window closes, they cannot reject the invoice as deficient. The 2026 amendment was designed to stop payers from sitting on invoices for weeks before flagging a technical deficiency.

A proper invoice must include all of the following:

The two most commonly missing fields for trades contractors are the period of work(a date range like “April 7 to April 18, 2026”) and the contract reference (a job address or contract date). An invoice that says “Plumbing work: $3,800 + HST” with nothing else is not a proper invoice under the Act.

For the full checklist with worked examples, see the dedicated guide on proper invoice requirements or the blog post on proper invoices under the Construction Act.

The 28-day payment clock

The clock starts the day the payer receives your proper invoice. Not the day you send it. Not the day the work finished. The day the invoice arrives.

How the payment chain works

If you billed the owner directly, the owner has 28 days to pay you. If you billed a general contractor, the GC has 28 days to pay you after receiving the invoice, regardless of whether the owner has paid the GC. The GC cannot use “pay when paid” clauses to delay your payment; those clauses are void under the Act.

If you are a subcontractor paid through a GC who has already collected from the owner, the GC must pass your payment down within 7 days of receiving it. The obligation flows down every tier.

The 14-day dispute window

When a payer receives your proper invoice, they have exactly 14 days to send you a Notice of Non-Payment (Form 1.1). This notice must:

• State the specific amount being withheld
• Give specific reasons for withholding that amount
• Not be vague. A general objection (“some deficiencies”) may be legally ineffective

If no valid Form 1.1 arrives within 14 days, the payer cannot dispute the invoice later. The full amount is owed by day 28.

After the 14-day window closes, the payer must pay the undisputed portion even if they filed a notice about part of the invoice. Withholding the entire payment over a partial dispute is not permitted.

Day-by-day timeline

What happens if the customer does not pay by day 28

You have three practical options, and you can pursue them in parallel.

1. Statutory interest (automatic, no action needed)

Interest begins accruing at the greater of the Courts of Justice Act pre-judgment rate or your contract rate, starting from day 29. You do not need to do anything to earn it. When payment eventually arrives, you are owed the principal plus that interest. Reference it explicitly in any written demand. Most customers will pay quickly once they realize the meter is running.

2. ODACC adjudication (fast, low cost)

ODACC (Ontario Dispute Adjudication for Construction Contracts) is a body created specifically by the Construction Act. It is faster and cheaper than courts:

• No referral fee for claims under $50,000 (adjudicator fees apply separately; check odacc.ca for current rates)
• For claims of $50,000 or more: $600 + HST referral fee paid by the claimant
• Decisions typically rendered within 30 days
• No lawyer required, though legal help can be valuable on larger claims
• Decision is binding and enforceable like a court judgment

See the full guide on ODACC adjudication for Ontario contractors for the step-by-step process.

3. Construction lien (before 60 days, or you lose the right)

You have 60 days from the last day you supplied services or materials to register a construction lien on the property. A lien secures your unpaid amount against the property and gives you significant leverage. Miss the 60-day deadline and the right is gone permanently.

The lien clock and the payment clock run at the same time. Do not wait for the full 28-day payment cycle to expire before checking your lien deadline. If work finished 40 days ago, you have 20 days left.

See the glossary entry on the construction lien preservation deadline for province-by-province details. Ontario’s deadline is 60 days from last supply.

Why most invoicing tools do not qualify under Ontario law

Tools like Jobber, Housecall Pro, ServiceTitan, and most general accounting software were built for the US market and use American billing conventions. They have no concept of the Ontario Construction Act’s proper-invoice requirements.

Specifically, their default templates typically omit:

• The period of work (the required date range field). US tools usually just show an invoice date.
• A contract reference in the format the Act requires. Job addresses and PO numbers are often optional or buried.
• Explicit HST business number on every invoice with the tax amount stated as a separate line (required for Canadian GST/HST compliance, and also necessary for HST Input Tax Credits for your customers).
• The specific payment recipient information the Act requires.

Adding these fields manually every time, for every invoice, is error-prone. Miss one field once and you are back to day zero on the payment clock.

How Markup invoices qualify out of the box

Markup was built specifically around the Ontario Construction Act. Every invoice template includes all seven required proper-invoice fields by default. The period of work and contract reference are required fields, not optional ones, so they cannot be accidentally omitted.

Markup also:

• Tracks the 28-day payment clock from the invoice send date and alerts you when a customer is approaching the deadline
• Calculates statutory holdback automatically based on the province
• Separates HST from the base amount on every invoice and includes your Business Number
• Tracks subcontractor payments toward the T5018 $500 threshold

The Plus plan ($89/month, or $73/month billed annually) includes all Construction Act compliance features. There is a free 14-day trial.

Frequently asked questions

This page is for general information only and does not constitute legal advice. Ontario Construction Act rules depend on the specific terms of your contract and your particular circumstances. For advice specific to your situation, consult a construction lawyer licensed in Ontario.