How to Spot Underpayments on Your Builder's Payment Schedule

What is a Payment Schedule?

A payment schedule is the builder's formal response to your progress claim. Under the Security of Payment Act (SOPA), when you submit a payment claim, the builder must respond with a payment schedule within a set timeframe (15 business days in QLD, 10 business days in NSW and VIC).

The payment schedule tells you:

• How much the builder intends to pay (the "scheduled amount")
• If it's less than what you claimed, the reasons for each reduction

Think of it like a report card on your claim. The builder goes through your numbers and either agrees or pushes back. The problem? Most subbies just look at the total at the bottom and don't question the detail. And that's where the money disappears.

Why Underpayments Are So Common

Let's be real: most builders aren't trying to rip you off out of malice. But the construction industry runs on tight margins, and builders have every incentive to assess your work conservatively. Their quantity surveyor is trained to minimise what goes out the door. Your job is to make sure you get every dollar you're entitled to.

The trouble is, underpayments rarely look dramatic. A builder who slashes your claim in half is asking for a fight. A builder who shaves 3-5% off each line item? That flies under the radar — until you realise it's costing you $25,000 over the life of a project.

The 5 Most Common Underpayment Methods

1. Percentage Complete Disputes

This is the most common one. You say you're 80% complete on a line item; the builder says you're 70%. On a $100,000 item, that's a $10,000 difference — from a single line.

Builders will often assess completion percentages lower than reality, especially for work that's hard to measure visually (like rough-in work behind walls, or partially completed systems). The fix? Take dated photos of your work at every stage, and keep a daily log of what was done. When the builder says you're 70% done, you can show exactly why you're at 80%.

2. Unapproved Variation Deductions

You did variation work that was verbally approved by the site supervisor. You include it in your claim. The builder's payment schedule removes it entirely because there's "no written approval."

This is frustrating but predictable. Builders will almost always reject variations that aren't backed by a signed variation order. Even if the site foreman said "yeah, just do it" — if it's not in writing, the builder's QS will strike it out.

Prevention: Never start variation work without written confirmation. An email saying "As discussed on site today, please proceed with [variation description] at the agreed rate of $X" is enough. Get the foreman to reply "confirmed" and you're covered.

3. Phantom Back-Charges

The builder deducts amounts for "defect rectification," "clean-up," or "damage to other trades' work" — without ever telling you about the issue beforehand. You find out for the first time when you read the payment schedule.

Under most contracts, the builder should give you the opportunity to rectify defects before back-charging you. If they didn't notify you and went straight to deduction, that's a strong argument for adjudication. Check your contract's defect rectification clause — it almost certainly requires notice and an opportunity to fix.

4. Retention Over-Deduction

Retention is typically 5% of each progress claim (sometimes 10% in the early stages), held as security until practical completion and the defects liability period. But sometimes builders:

• Deduct more than the contractual retention percentage
• Continue deducting retention after the cap has been reached (usually 5% of the total contract value)
• Don't release the first half at practical completion
• Don't release the second half after the defects liability period

Track your retention carefully. If you've already hit the cap and the builder is still deducting, that's your money being held without any contractual basis.

5. Rounding and "Administrative Adjustments"

This one's subtle. The builder's QS rounds down your quantities, adjusts unit rates slightly, or applies "administrative" corrections that nobody questions. Individually, each adjustment might be $200 or $500 — easy to overlook. But across 30 line items and 12 claim periods, you're looking at thousands of dollars.

The fix is tedious but necessary: compare every single number on the payment schedule against your claim. Unit rate, quantity, amount, percentage complete — all of it. This is exactly the kind of work that most subbies don't have time for, which is why automated comparison tools exist.

How to Compare Your Claim Against the Payment Schedule

Alright, you've got your progress claim in one hand and the builder's payment schedule in the other. Here's how to do a proper comparison:

Step 1: Match Line Items

Go through every line item on your claim and find the corresponding entry on the payment schedule. Watch for line items that:

• Are missing entirely from the builder's assessment
• Have been combined or split differently
• Have a different description (which might indicate the builder is assessing against a different scope)

Step 2: Compare the Numbers

For each matched line item, compare:

• Contract value: Do you both agree on the total value of this item?
• Percentage complete: Does the builder's assessment match yours?
• Value of work done: contract value × percentage complete — do the numbers match?
• Previously certified: Does the builder agree with what's been paid to date?
• This payment: Value of work done minus previously certified — is it correct?

Step 3: Check Variations Separately

Variations should be listed separately. For each variation, check:

• Is it included at all?
• Is the amount correct?
• Is the builder claiming it's "not approved" despite evidence to the contrary?

Step 4: Verify Retention Calculations

Check that:

• The retention percentage is correct per your contract
• The cumulative retention hasn't exceeded the cap
• Any retention releases have been applied

Step 5: Calculate the Total Discrepancy

Add up all the differences. This gives you the total underpayment — the gap between what you claimed and what the builder is paying, broken down by reason. This is your evidence for a payment dispute or adjudication application.

What to Do When You Find a Discrepancy

You've done the comparison and found the builder has underpaid you by $14,000. Now what?

Option 1: Raise It Directly

Start with a conversation. Send an email (always in writing) listing the specific line items you disagree with and why. Attach any supporting evidence — photos, approved variations, measurements. Many payment disputes get resolved at this stage if you present clear, specific evidence.

Option 2: Include It in Your Next Claim

If the builder underpaid on Claim 3, make sure Claim 4 accounts for it. Your "previously certified" column should reflect what you believe was earned, not just what the builder paid. This keeps the dispute visible and accumulates the evidence.

Option 3: Apply for Adjudication

If the builder won't budge, use the SOPA adjudication process. Having a clear, line-by-line comparison of your claim vs the payment schedule is exactly the kind of evidence adjudicators need to make a determination in your favour.

Real Numbers: How Small Underpayments Add Up

Let's look at a realistic example. Say you're a ceiling and partition subbie on a $600,000 contract. You submit monthly claims. The builder consistently assesses you 4% lower than your claim on completion percentages:

Total shortfall over 6 months: $17,520. That's a holiday, a new ute, or two months of wages for an apprentice — gone because nobody compared the numbers line by line.

Why Manual Comparison Doesn't Scale

Let's be honest: most subbies don't do line-by-line comparisons because it's painful. You're on site all day, you come home knackered, and the last thing you want to do is spend two hours cross-referencing a spreadsheet against a PDF.

Even if you do find the time, it's error-prone. The builder's payment schedule might use different line item descriptions, different numbering, or a completely different format. Matching them up manually is a headache.

And if you're running multiple projects? Forget it. You'd need a full-time admin person just to keep on top of claim comparisons.

Automate the Comparison

This is exactly why we built SubbieClaim. You upload the builder's payment schedule — whether it's a PDF, Excel, or scanned document — and our AI automatically matches it against your progress claim, line by line.

It flags every discrepancy: percentage differences, missing variations, incorrect retention, phantom back-charges — everything. You get a clear summary of the total underpayment and the specific line items causing it.

No spreadsheets. No manual matching. No guessing. Just hard numbers that show exactly what you're owed.