A letter of demand is a formal written request for payment of money you are owed. To write one in Australia, confirm the debt is actually due, identify who owes it and why, state the exact amount, set a clear deadline for payment, explain what you may do if the deadline passes, and keep proof that the letter was sent. It should be factual, firm and free of threats, so it can later be shown to a court or tribunal.
A letter of demand tells a person or business, in writing, that they owe you a specific sum and that you expect payment by a set date. It is usually the last step before you consider court or tribunal action, and it is often the first time the debtor realises you are serious.
It is not a court document, and sending one does not start legal proceedings. It also does not have to come from a lawyer. Anyone who is owed money can send one, and a business, agent or solicitor can send one on your behalf.
PayClaim is not a law firm and does not provide legal advice or guarantee payment.
Gather the invoice, contract, purchase order, emails or messages that show what was agreed and when payment was due. Note the due date and any payment terms. If your terms allow interest or late fees, find the exact clause.
Address the letter to the correct legal entity. For a business, that means the registered company or trading name and its ABN or ACN where you have it, not just a first name. Then describe the debt plainly: “Invoice 1042 dated 3 March 2026 for landscaping works at 12 Example Street, due 2 April 2026.”
Give one figure, in dollars and cents, and show how it is made up if there is more than one invoice or if you are adding contractual interest. Do not round, estimate or add amounts you cannot justify. An inflated demand is easy for a debtor to dispute and looks bad later.
State the date by which payment must be received. A deadline of 7 to 14 days from the date of the letter is commonly used. Give a calendar date rather than “within 10 days” so there is no argument about when the clock started. Include exactly how to pay: account name, BSB and account number, or a payment link, plus a reference.
Explain, without exaggeration, that if payment is not received by the deadline you may take further action to recover the debt, which may include commencing proceedings in the relevant court or tribunal, and that you may seek to recover costs where the law allows. Only say what you are genuinely prepared to do.
Date the letter, sign it, and keep a copy. Send it by a method that creates a record: registered post, express post with tracking, email with a read or delivery receipt, or all of these together. Keep the tracking number, the sent email and any bounce or delivery notice. If you later file a claim, this is your evidence that the debtor was warned.
The most effective letters of demand are calm, specific and slightly formal. Write in short sentences. State facts, not feelings. Use “you” and “we” rather than legalese, but keep it businesslike. The letter should make clear that this is no longer a friendly reminder, that you have documented everything, and that you know what your next step is. Firmness comes from precision, not from capital letters or exclamation marks.
Many people find a letter is taken more seriously when it comes on a third party’s letterhead rather than their own. That is one reason people use a solicitor or an authorised agent such as PayClaim to issue the demand on their behalf.
No. There is no requirement in Australia for a letter of demand to be written or signed by a lawyer. You can write it yourself, use a template, or have an authorised agent prepare and send it on your behalf.
A period of 7 to 14 days is commonly used. Give a specific calendar date so there is no argument about when the deadline falls.
Both, if you can. Email is fast and time-stamped; tracked or registered post shows the letter reached the address. Keep the records from each method.
Only where your contract, quote or trading terms clearly provide for it, or where a court later awards it. Do not add interest simply because you feel entitled to it.
Respond in writing, address the specific points raised, and keep copies. If the dispute is genuine, you may need to negotiate or take it to the relevant tribunal or court. If it is a delay tactic, restate your deadline.
You can consider filing a claim with the small-claims court or tribunal in your state or territory. See our guide on what to do if your letter of demand is ignored.
PayClaim prepares your letter of demand on its own letterhead, as your authorised agent, and sends it to the debtor with a copy to you. You see a free watermarked preview before you pay anything. The fee is a flat A$69, with no commission on what you recover. Pay by Visa, Mastercard or Afterpay.