What is a pay less notice in construction?

A pay less notice is the notice a paying party must give if it intends to pay less than the sum it previously notified. It must say what sum is considered due and the basis for it, and be given within the time the contract requires.

Why it matters to a subcontractor

If a valid pay less notice is not given in time, the payer is generally required to pay the notified sum in full by the final date for payment. That is why a late or defective pay less notice is one of the first things to check when a payment is short.

What it has to contain

• The sum the payer considers due.
• The basis on which that sum was calculated.

The deadline

The contract sets how long before the final date for payment the notice must be given. It is often only a few days. Check your contract and note the date any notice arrives.

Common questions

What happens if no pay less notice is given?

Generally the payer has to pay the notified sum by the final date for payment. Get advice on your own situation, because the detail depends on the contract and the notices that were served.

Can a payer pay less without a pay less notice?

Not safely. The Construction Act expects the notice. A payer who wants to deduct, for example for defects or delay, should give one in time.

This page is general information for UK construction subcontractors and is not legal advice. Contracts differ, so check yours, and take advice on a specific dispute.