{{ propApi.closeIcon }}
Our industry
Our industry $vuetify.icons.faArrowRight
Housing industry insights Economics Data & forecasts Tailored research and analysis Advocacy & policy Advocacy Policy priorities Position statements Submissions News and inspiration Industry news Member alerts Media releases HOUSING Online
Business support
Business support $vuetify.icons.faArrowRight
Become an apprentice host Hire an apprentice Why host a HIA apprentice? Apprentice partner program Builder & manufacturer program Industry insurance Construction legal expenses insurance Construction works insurance Home warranty insurance Tradies & tool insurance Planning & safety solutions Building & planning services HIA SafeScan Safe Work Method Statements (SWMS) Solutions for your business Contracts Online HIA Tradepass Advertise jobs Trusted support & guidance Contracts & compliance support Professional services Industrial relations Member savings Toyota vehicles The Good Guys Commercial Fuel savings See all
Resources & advice
Resources & advice $vuetify.icons.faArrowRight
Building it right Building codes Australian standards Getting it right on site See all Building materials & products Concrete, bricks & walls Getting products approved Use the right products for the job See all Managing your business Dealing with contracts Handling disputes Managing your employees See all Managing your safety Falls from heights Safety rules Working with silica See all Building your business Growing your business Maintaining your business See all Other subjects COVID-19 Getting approval to build Sustainable homes See all
Careers & learning
Careers & learning $vuetify.icons.faArrowRight
A rewarding career Become an apprentice Apprenticeships on offer Frequently asked questions Study with us Find a course to suit you Qualification courses Learning on demand A job in the industry Get your builder's licence Continuing Professional Development (CPD) Find jobs
HIA community
HIA community $vuetify.icons.faArrowRight
Join HIA Sign me up How do I become a member? What's in it for me? Mates rates Get involved Become an award judge Join a committee Partner with us Our initiatives HIA Building Women GreenSmart Kitchen, bathroom and design hub Get to know us Our members Our people Our partners Support for you Charitable Foundation Mental health program
Awards & events
Awards & events $vuetify.icons.faArrowRight
Awards Awards program People & Business Awards GreenSmart Australian Housing Awards Awards winners Regional Award winners Australian Housing Award winners 2024 Australian Home of the Year Enter online Industry events Events in the next month Economic outlook National Conference Events calendar
HIA products
HIA products $vuetify.icons.faArrowRight
Shop @ HIA Digital Australian Standards Contracts Online Shipping & delivery Purchasing T&Cs See all Products Purchase NCC 2022 Building codes & standards Economic reports Hard copy contracts Guides & manuals
About Contact Newsroom
$vuetify.icons.faTimes
$vuetify.icons.faMapMarker Set my location Use the field below to update your location
Address
Change location
{{propApi.title}}
{{propApi.text}} {{region}} Change location
{{propApi.title}}
{{propApi.successMessage}} {{region}} Change location

$vuetify.icons.faPhone1300 650 620

Calculating default interest under HIA contracts

Sometimes owners can be late to pay their progress claim by the due date. But did you know HIA building contracts allow the builder to charge interest on these payments when they become overdue? See here for directions on how to calculate default interest under HIA building contacts.

The following HIA contracts QC1, QC2 and QC3 entitle the builder to charge default interest on late payments. The default interest rate in these contracts is 18% per annum, unless agreed otherwise between the parties to the contract.

How do you work it out?

Interest owing can be calculated using this simple formula:

Interest payable = Debt outstanding x interest rate x time overdue

Example:

Bob the Builder has an HIA QC1 2010 New Home Construction Contract with Jenny the Owner. Bob submitted a progress claim at the completion of the Enclosed Stage for $40,000 on the 12 March 2013.

The contract requires Jenny to pay the progress payment within five working days. Jenny pays the claim on 28 March 2013, which is 10 days late. Bob decides to charge Jenny default interest given she has been late with payment of all claims to date.

Bob checks Item 14 Schedule 1 of the contract and notes that no amount has been stated, meaning the default rate is 18% per annum.

Bob would calculate the default interest using the following formula:

Interest = Debt outstanding x interest rate x time overdue
= $40,000 x (18%/ 365 days) x 10 days
= 40,000 x (0.18/365) x 10
Interest = $197.26
Note: remember leap years have 366 days.

To find out more, contact HIA's Contracts and Compliance team

Email us

Share with your network:
More articles on:
{{ tag.label }} {{ tag.label }} $vuetify.icons.faTimes
Find the latest expert advice, guides and much more!

Managing your business


 

Can’t find what you need, check out other resources that might be closer to the mark.

Explore resources

Contracts Online 


 

The industry’s go-to digital platform. 

No matter the size of the job, a watertight building contract is critical to protect your business, and the current climate presents a great opportunity to go digital with your contracts.

Take me there

QLD Claim for Extension of Time (Pad of 20)

Builders who want an extension of time for completing work will need this Queensland Claim for Extension of Time pad, which includes 50 sheets. This product complies with Queensland legislation as the builder must advise the clien...

QLD Minor Works Contract (under $3K) (Pad of 20)

This contract is suitable for minor projects up to a value of $3300, such as a patio or shed installation, which doesn't require building approval. It’s available in a handy tear-off pad of 20. This is a hard copy document and wil...

QLD Progress Claim Certificate (Pad of 20)

The Queensland Progress Claim Certificate (pad of 20) provides an efficient way for a builder to claim payment from a client or financial institution. This is a hard copy version of the certificate and will be mailed to you once ...

QLD Variation Document (Pad of 25)

The Queensland Variation Document Pad (of 25) details changes or variations to works requiring an update to the contract between builder and owner. It can also be used for variations between builder and sub-contractor. This is a ...