Supplier Pay On-Time or Pay Interest Policy (RMG 417)

The policy came into effect 1 January 2020, introducing 5 day payment terms where Pan‑European Public Procurement On-Line (Peppol) compliant eInvoicing capability exists.

The 1 July 2022 Supplier Pay On-Time or Pay Interest Policy is now in effect and replaces the previous version dated 1 January 2020. Entities are reminded that the $1 million threshold has been removed and the maximum payment terms now apply to all contracts regardless of value.
The Department of the Treasury conduct a mandatory annual survey of payment times for non-corporate Commonwealth entities, the Pay on-time survey performance report, collecting information about their performance against the policy. For information on the survey, see the Department of the Treasury's website.


This guide is relevant to all non-corporate Commonwealth entities (NCEs). It is particularly relevant to Chief Financial Officers (CFOs) and their staff, and officials who are responsible for the NCEs internal controls and processes.

Corporate Commonwealth entities (CCEs) are encouraged to apply this policy.

Key points

This guide:

  • outlines the Government’s policy on payment timeframes for invoices arising from procurement contracts that are subject to the Commonwealth Procurement Rules
  • outlines the Government's policy on the use of payment cards for purchases of goods and services with a total contract value below $10,000
  • uses terms as defined in the Commonwealth Procurement Rules
  • uses GST inclusive values.


This policy facilitates timely payment to suppliers, assists with their cash flow, and reduces the cost of supplying to the Commonwealth. 

As a general principle, NCEs are encouraged to implement efficient and timely receipting and payment practices to ensure that supplier payments are made as quickly as possible.


Related resources, including the Commonwealth Procurement Rules, and links to the following Tools and templates are located in the right hand menu.


Variable consideration


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