Estimating Jobs
Deposits for Contractors: How Much and How to Ask
Short answer
Standard deposit is 25–50% on jobs over $1,000, payable at contract signing. Use it to buy materials and lock the customer in. Some states cap residential deposits (California: 10% or $1,000, whichever is less). Always disclose the deposit amount in the quote, not at the doorstep.
A deposit does two things: it funds the materials so you are not bankrolling the customer, and it psychologically commits them to the job. No deposit, no commitment — the customer will reschedule, ghost, or shop you against three other contractors who quoted after you did. The trick is asking for it confidently.
How much to charge by job type
| Job type | Typical deposit |
|---|---|
| Service call / repair (<$500) | None — pay at completion |
| Small install ($500–2,000) | 25% |
| Mid-size project ($2,000–10,000) | 33–50% |
| Custom or special-order materials | 100% of material cost |
| Multi-week renovation (>$10,000) | Progress billing: 20% deposit, 40% mid, 40% final |
State-specific caps
Several states cap residential contractor deposits. The most restrictive: California ($1,000 or 10%, whichever is less, on home improvement contracts). Oregon, Nevada, and Maryland have similar but less strict rules.
Commercial contracts are generally not capped. If you do residential work in a regulated state, structure progress billing to comply: small deposit at contract, larger payment at material delivery, balance at completion.
How to ask for the deposit
Build the deposit into the quote so it is never a surprise. The line on the quote reads: 'Total: $4,500. Deposit due at contract signing: $1,500. Balance due upon completion: $3,000.'
Collect electronically — Stripe, ACH, or a card payment link sent by text. Don't wait for a check. The day after the customer signs, the deposit hits your account.
If a customer pushes back on the deposit, the line is: 'The deposit covers the materials I have to order to start your job. Once we are on site, you only pay for completed work.' Customers who refuse a reasonable deposit are customers who would have refused the final invoice too.
What if the customer cancels after paying the deposit?
Refund the deposit minus any materials already ordered (non-returnable items: full charge; returnable items: refund minus restocking fee) and any design or planning time already billed. State this refund policy on the quote document so it is not a surprise.
Never refund 100% on cancellations — it teaches the next customer that the deposit is a free option to back out.
Frequently asked questions
Should I ask for a deposit on a $300 service call?
No. Deposits make sense above $1,000. Smaller jobs are paid at completion via card-on-truck or a payment link sent at the time of service.
Can I take a credit card for the deposit?
Yes — and you should. Card payments via Stripe or Square typically clear in 1–2 business days and reduce no-show risk because the customer has skin in the game.
What's progress billing?
Splitting a large project into payment milestones (e.g., 20% deposit, 30% at rough-in, 30% at finish, 20% at completion). It funds your cash flow during long jobs and limits your exposure if the customer disappears.
Turn pricing into invoices.
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Sources & further reading
Primary sources we consulted when writing and reviewing this guide.