What a split payment is
A split payment is one payment from the client that is divided between several suppliers. On a design job that usually means the homeowner pays for a stage, say “planning drawings”, and that money is shared between the building designer, the surveyor whose feature survey fed the drawings, and perhaps a town planner.
The important part is not the arithmetic. It is that each supplier is paid their own share for their own supply, ideally with a tax invoice in their own name, rather than the lead practice collecting everything and paying the others out later.
Three ways practices handle consultant fees
| Arrangement | Who the client pays | Typical friction |
|---|---|---|
| Client engages each consultant directly | Each consultant, separately | The client juggles several contracts, invoices and due dates. |
| Lead practice includes consultants in its fee | The lead practice, for everything | The lead practice carries the consultants’ costs and the GST on the full amount. |
| Split payment from one schedule | One payment per stage, shared out | Needs the split agreed up front, and a payment system that can divide funds. |
Why split at the stage, not the job
Splitting the total job fee once, at the start, sounds simpler, but it breaks as soon as scope changes. Splitting per stage ties each consultant’s money to the point where their work is delivered: the surveyor on Stage 1, the engineer on documentation, the energy assessor when the design is fixed.
It also gives everyone a natural checkpoint. If Stage 2 is never paid, the consultants whose work sits in Stage 3 haven’t started yet, and nobody has done work they can’t be paid for.
A worked example
- Stage 3, documentation: client pays
- A$7,535
- Building designer: working drawings
- A$4,400
- Structural engineer: footing and framing design
- A$2,420
- Energy assessor: rating
- A$715
Illustrative figures, GST-inclusive. Each share would be paid to its supplier with a tax invoice in the supplier’s name.
What usually goes wrong
- The split isn’t written down. Everyone remembers a different number. Put each consultant’s fee, and the stage it belongs to, in the proposal the client accepts.
- Consultant fees change after acceptance. An engineer reprices after a design change. Treat it as a variation the client approves, not a quiet adjustment.
- Someone isn’t set up to receive money. Have a fallback: the lead practice receives that share and passes it on, recorded as such.
- GST is applied to the wrong party. Who supplies what to whom decides who charges GST. See the GST on consultant fees guide.
Checklist for setting up a split
- List every party on the job and the stage where each delivers work.
- Agree each consultant’s fee with them before the client sees it.
- Decide, per consultant, whether they supply the client directly or supply you.
- Put the schedule, with the splits, in the client’s fee proposal (how to write one).
- Invoice per stage when the stage trigger is met (staged invoicing).
- Record each payout and invoice against the stage.
Where DrafterShare fits
DrafterShare is being built to do steps 4 to 6 for you: one schedule, one payment per stage, each share paid directly by a regulated payments provider (planned). It is pre-launch, so try the live demo or join the pilot. Roles: building designers, engineers, other consultants.
Questions
Is a split payment the same as a trust account?
No. In a split payment each share is paid to its supplier. DrafterShare is not planned to hold client money or run a trust account; a regulated payments provider is planned to process and pay out funds.
Does the client have to agree to a split?
Yes. The split should be in the fee proposal or contract the client accepts, so they know who is supplying each part of the work.
What if a consultant wants to invoice the client directly anyway?
That is the direct-engagement arrangement and works fine. A split schedule can still show their fee so the client sees the whole job cost in one place.