Corporate

Getting Paid in Construction: Prompt Payment and Holdbacks in Ontario

Contractors and subcontractors in Ontario have strong payment rights. Here is how prompt payment, holdbacks and adjudication work.

A building with a sign on the front of it

Ontario's Construction Act has rules to make sure people who do construction work get paid.

The short answer

An owner must generally pay a proper invoice within 28 days, and contractors must pay their subcontractors within 7 days after being paid. Owners hold back 10% until the lien period is over. Disputes can go to fast adjudication.

Prompt payment

  • Owners must pay a proper invoice within 28 days, unless they give a notice of non-payment within the time the Act allows.
  • Contractors must pay subcontractors within 7 days after receiving payment.
  • The rules apply to contracts made under the current Act and its regulations.

Holdback

  • The owner must hold back 10% of the value of the work, to protect subcontractors and suppliers.
  • The holdback is released after the period for liens has passed and no liens are registered.

Liens

Modern building with mushroom-shaped roofs by river

People who supply work or materials to an improvement can register a construction lien, within strict deadlines, if they aren't paid.

Adjudication

Payment disputes can go to adjudication, a fast process with a decision usually within weeks, that is binding on an interim basis.

Homeowners

Many of these rules apply to residential renovations too. Keep the holdback, ask for proper invoices, and get advice before paying the final amount.

Talk to NEO

Running a small business? NEO helps with collections, customer and supplier disputes and Small Claims Court, and refers you to a lawyer where a matter needs one. Call 647-200-3526 or toll-free 888-519-2435, email info@neolegalservices.com, or book a free consultation.

Sources

Read next: Running a Not-for-Profit in Ontario: The ONCA Basics

General Ontario legal information, not legal advice for your matter, and reading it does not create a retainer. Sources checked 16 October 2026: check the current law, forms and dates before you act.

Photos from Unsplash: a building with a sign on the front of it · Modern building with mushroom-shaped roofs by river.

This article is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.

Not sure where you stand? A licensed paralegal can look at your documents and tell you your options.

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Law Society of Ontario — Barreau de l'Ontario
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