Getting Paid
Your money, your contract, and what to do when a client or main contractor stalls.
South Africa has no Security of Payment Act. There is no statutory ladder that forces a client to pay you by a fixed date, and no automatic right to adjudication unless your contract gives you one. That means the contract you sign is the single most important thing standing between you and your money. This hub walks you through getting the contract right, charging interest when payment is late, handling retention and deposits, and chasing what you are owed through the Small Claims Court or the Magistrates' Court. Plain English, real South African law, no jargon.
The contract is everything
Unlike the UK or Australia, South Africa has no Security of Payment Act and no statutory right to be paid within a set number of days. Whatever the contract says about payment is what governs the job. If you work on a verbal handshake and the client stops paying, you can still claim, but you have to prove the terms, the price and the work done, which is far harder. Put your payment terms in writing before you start: the price, the deposit, when progress payments fall due, how many days the client has to pay each invoice, and what happens if they do not. A signed quotation or a short building contract is enough. Standard industry contracts such as JBCC and GCC build in their own payment and certification timelines, so if you sign one, read the payment clauses and diarise the dates. A word of warning on the 'pay-when-paid' or 'pay-if-paid' clause: in South Africa these clauses are generally enforceable, so a subcontractor can be left waiting until the main contractor is paid by the employer. If you are a subbie, push back on that wording or negotiate a longstop date.
Charging interest on late payment
When a client pays late, you are entitled to interest on the overdue amount. The rate is the prescribed rate of interest set under the Prescribed Rate of Interest Act 55 of 1975. It tracks the Reserve Bank repo rate plus 3.5 percent and is currently 10.50 percent per year. The rate changes when the repo rate moves, so always check the current figure and the date it took effect before you state a number on an invoice or letter of demand. Interest generally runs from the date the debt becomes due (often the date payment was demanded), not from the date you did the work. Spell out in your contract when interest starts and at what rate, and it becomes much easier to enforce. Your contract can also set its own (higher) interest rate by agreement, in which case that agreed rate applies instead of the prescribed rate.
Deposits and progress payments
Asking for a deposit before you buy materials or mobilise is normal and sensible, especially on larger jobs. There is no law capping a deposit, but keep it reasonable and tie it to a clear stage of work so the client understands what they are paying for. On longer jobs, bill in stages rather than waiting until the end: agree a payment schedule up front (for example, deposit on signing, a payment when the slab is down, another at lock-up stage, and the balance on handover). Staged payments protect your cash flow and stop one disputed final invoice from swallowing the whole job's profit. Issue a proper tax invoice for each payment so your records and your VAT position stay clean.
Retention: what it is and getting it released
Retention is money the client or main contractor holds back from each payment (commonly five to ten percent) as security that you will come back and fix any defects. It is released in stages, typically half at practical completion and the balance at the end of the defects liability period once any snags are sorted. Retention is a contract matter, not a statutory one, so the amount, the percentage and the release dates all come from what you signed. The two things that catch trades out are: not knowing the defects period has run (so the money sits unclaimed), and not formally asking for release. Diarise your retention release dates and send a written request when each one falls due. Keep the snag list and sign-off records, because that is what proves the defects period is over and the money is owed.
When they still will not pay
If polite reminders fail, send a formal letter of demand. It puts the debt in writing, sets a deadline, states the interest you are claiming, and is the step a court will expect you to have taken. Most disputes settle once a proper demand lands. If it does not work, your route depends on the amount. The Small Claims Court handles claims up to R20,000. It is cheap (around R100 to file), fast, and you do not use a lawyer, but only natural persons can bring a claim, not companies, so a sole proprietor can use it while a Pty Ltd cannot. There is active consultation about raising the limit to R50,000, so check the current ceiling when you file. Above R20,000 you go to the Magistrates' Court: the district court covers claims up to R200,000 and the regional court up to R400,000. Mind the clock as well: most debts prescribe (expire) after three years under the Prescription Act 68 of 1969, so do not let an old invoice drift. Issuing a summons interrupts prescription.