Prime cost item vs provisional sum
An allowance for an item, or an estimate for work, and what each state's Act says about each.
A prime cost item is an allowance for an item, such as a fixture or fitting not yet chosen or priced; a provisional sum is an estimate for work whose cost the builder can't state when the contract is signed, after making reasonable inquiries. Victoria (section 3), Queensland (Schedule 1B, sections 1 and 10) and Tasmania (sections 3 and 7) define both. Either way, the price moves with the actual cost under the contract's clause on allowances, and in Victoria that adjustment sits outside the Act's variation sections (sections 37(5) and 38(8)).
Not legal advice — your contract's own variation clause matters too.
What each state's law says about them
Each row is a point the law can deal with and each column a state or territory. Where the law says something, the cell names the section; where the Act, searched in full, says nothing, the cell says so.
| The point | NSW | VIC | QLD | WA | SA | TAS | ACT | NT |
|---|---|---|---|---|---|---|---|---|
| Defines a prime cost item | The Act says nothing on this | Defined (section 3) | Defined (Schedule 1B, section 1) | Not in the Act; the prescribed notice to owners explains it | Not in the Act; the prescribed notice to owners explains it | Defined (section 3) | The Act says nothing on this | The Act says nothing on this |
| Defines a provisional sum | The Act says nothing on this | Defined (section 3) | Defined (Schedule 1B, section 10) | Not in the Act; the prescribed notice to owners explains it | Not in the Act; the prescribed notice to owners explains it | Defined (section 7) | The Act says nothing on this | The Act says nothing on this |
| The duty on the amount | The Act says nothing on this | A warranty on provisional sums, and an offence to put either in below the reasonable cost (35 penalty units) (sections 20 and 21) | A warranty that the amount was calculated with reasonable care and skill (Schedule 1B, section 26) | An offence to state either below the least it could reasonably cost, $10 000 (section 12) | The notice: provisional sums must be "fair and reasonable estimates" | A warranty that the amount was calculated with reasonable care and skill (section 30) | The Act says nothing on this | The Act says nothing on this |
| What the contract must set out | Only the general warning next to the price, where the price may be varied (section 7(5)) | A schedule for each item or sum: a description, a cost breakdown with quantities and unit cost, and how any excess charge is worked out; 50 penalty units (section 22) | The Act says nothing on this | The Act says nothing on this | The notice: "THIS PRICE MAY CHANGE" or "ESTIMATE ONLY" next to a price that may change | The Act says nothing on this | The Act says nothing on this | The Act says nothing on this |
| Invoices to the owner | The Act says nothing on this | A copy of any invoice or receipt, as soon as practicable; 20 penalty units (section 23) | The Act says nothing on this | The Act says nothing on this | The Act says nothing on this | The Act says nothing on this | The Act says nothing on this | The Act says nothing on this |
| Is an adjustment a variation? | The Act says nothing on this | No: the variation sections don't apply to terms dealing with them (sections 37(5) and 38(8)) | The Act says nothing on this | The Act says nothing on this | The Act says nothing on this | The Act says nothing on this | The Act says nothing on this | The Act says nothing on this |
| A margin on an overrun | The Act says nothing on this | The contract must say how any excess amount is worked out (section 22(a)(iii)) | The Act says nothing on this | The Act says nothing on this | The notice: "plus a surcharge, which may be up to 15% of the cost of the item" | The Act says nothing on this | The Act says nothing on this | The Act says nothing on this |
Telling them apart
The test is whether the allowance is for a thing or for work. Western Australia's prescribed notice to owners gives bathroom tiles as a prime cost example and site works as a provisional sum. South Australia's notice calls the estimated figure for work a provisional sum, and says provisional sums must be "fair and reasonable estimates" in the circumstances.
What Victoria asks the contract to show
Victoria is the only state that sets out what the contract has to contain for them: a separate schedule for each item or sum, with a detailed description, a breakdown of the cost estimate showing at least the estimated quantities and the unit cost, and how any amount charged above the actual increase is worked out (section 22). The builder also has to give the owner a copy of any invoice or receipt that shows the cost (section 23).
When the actual cost comes in
An item that costs more than its allowance adds the difference to the contract price, and one that costs less takes it off. The PC sum page works the difference out from your own figures, with GST and the change to the contract price, and the form puts it in writing for both parties to sign.
Sources
- Home Building Act 1989 (NSW): section 7(5). Read 07/10/2026.
- Domestic Building Contracts Act 1995 (Vic): sections 3, 20, 21, 22, 22(a), 23, 37(5), 38(8). Read 07/10/2026 and 08/10/2026.
- Queensland Building and Construction Commission Act 1991 (Qld): Schedule 1B, sections 1, 10, 26. Read 07/10/2026.
- Home Building Contracts Act 1991 (WA): section 12. Read 07/10/2026.
- Residential Building Work Contracts and Dispute Resolution Act 2016 (Tas): sections 3, 7, 30. Read 07/10/2026.
- Home Building Contracts Regulations 1992 (WA). Read 07/10/2026.
- Building Work Contractors Regulations 2026 (SA). Read 07/10/2026.
Fill in the variation
- $9.90 to send it. Filling it in and the preview PDF are free.
- Both parties sign it. The other party signs from the link we email them, on a phone or a computer — no app, no account.
- Follows your state's rules. It asks for what your state requires and prints its statement, and the PDF ends with a signing record: who signed, when, and from which device.
See a signed example (PDF)A fictional job, signed by both parties.