In Australia, a letter of demand can cost anywhere from nothing to several hundred dollars, depending on who sends it. Writing it yourself is free but is often ignored. A solicitor’s letter typically costs several hundred dollars. A debt collector usually charges a commission, meaning a percentage of whatever they recover. PayClaim prepares and sends the letter as your authorised agent for a flat A$69, with no commission and a free preview first.
There is no set price for a letter of demand because there is no set way to send one. The realistic options for an Australian small business, sole trader or individual are set out below. The figures are deliberately general: fees vary by firm, by debt size and by state, and you should get a quote before engaging anyone.
PayClaim is not a law firm and does not provide legal advice or guarantee payment.
Cost: Free, apart from postage and your time.
You write the letter, print it, sign it and send it. Templates are widely available, including our free letter of demand template.
The trade-off: A letter on your own letterhead, from the same person who has already sent reminders, is easy for a debtor to file under “later”. It carries no signal that anything has changed. Many DIY letters are also weakened by small mistakes: the wrong entity name, a vague amount, no deadline date, no proof of sending.
Best when: The debtor is cooperative and simply disorganised, or the amount is small enough that you would not pursue it further anyway.
Cost: Typically several hundred dollars for a standard letter. Some firms charge a fixed fee for this; others bill by time. Ask for the price in writing before instructing them.
A letter on a law firm’s letterhead carries weight, and a solicitor can advise you on whether the debt is recoverable, whether interest applies and what your options are. That advice is the real value, and it is what you are paying for.
The trade-off: On a modest debt, the fee can be a large fraction of what you are owed. Follow-up correspondence is usually charged in addition.
Best when: The debt is large, the facts are disputed, or you expect the matter to end up in court and want legal advice from the start.
Cost: Usually a commission on what they recover, meaning a percentage of the amount collected, sometimes with an upfront or listing fee as well. Rates vary with the age and size of the debt. Always ask for the agency’s fee schedule in writing.
Agencies handle the chasing for you and will typically send their own demand letters and make phone contact as part of a collection process.
The trade-off: If they recover the full amount, you receive the full amount less their percentage. Some agencies are only interested in debts above a certain size or in bulk portfolios, and the relationship with your customer is now in a third party’s hands.
Best when: You have many overdue accounts, you have already sent a demand that was ignored, or you would rather give up a slice of the debt than manage the process yourself.
Cost: A flat A$69 per letter. No commission. No percentage of what you recover. No follow-up billing for the letter itself.
PayClaim prepares a professional letter of demand on its own letterhead and sends it to the debtor as your authorised agent, with a copy to you. You see a free watermarked preview of the actual letter before you pay, so you know exactly what will be sent. Payment is by Visa, Mastercard or Afterpay.
The trade-off: PayClaim is not a law firm and does not give legal advice. If you need advice on whether you have a claim, or the matter is complex or disputed, a solicitor is the right call. And no letter from anyone can guarantee payment.
Best when: The debt is clear, you want a third-party letter that signals escalation, and you want to keep all of what you recover.
| Option | Typical cost | Commission on recovery? | Comes from a third party? | Includes legal advice? |
|---|---|---|---|---|
| Do it yourself | Free (postage only) | No | No | No |
| PayClaim letter | Flat A$69 | No | Yes (authorised agent) | No |
| Solicitor’s letter | Typically several hundred dollars | Usually no (fee for service) | Yes (law firm) | Yes |
| Debt collector | Usually a percentage of what is recovered, sometimes plus fees | Yes | Yes (agency) | No |
A useful way to think about it: compare the fee to the amount owed and to what you would realistically do next.
Sometimes, but not automatically. Whether you can add the cost of a demand letter to the debt depends on your contract terms and, if it goes further, on what a court or tribunal is prepared to award. Do not simply add A$69 or a solicitor’s fee to your demand unless your terms allow it. If in doubt, ask a solicitor.
See your letter before you pay anything. PayClaim prepares it, you review the free watermarked preview, and if you approve it we send it as your authorised agent and copy you in. Flat A$69. No commission. Visa, Mastercard or Afterpay.