A deposit keeps you from fronting material and labor on a handshake. Here is how much to ask for by job type, where the law draws the line, how to set up progress payments on the big ones, a calculator for your next job, and how to bring it up so the customer says yes.
For most residential jobs, a deposit of 10 to 33 percent of the total is normal and defensible. Small jobs where you are supplying material sit near a third. Larger jobs with long timelines break into a smaller deposit plus progress payments as the work hits milestones.
The real rule is simpler than a percentage: the deposit should cover the money you spend before the customer owes you anything. If you are buying $4,000 of material on Monday, a $500 deposit is not protecting you. Price the deposit to the cash you put at risk, not to a round number that feels polite.
These are the ranges working contractors commonly use. Where your state caps deposits (next section), the cap wins.
| Job | Typical deposit | Why |
|---|---|---|
| Labor-only, paid same day (handyman, cleaning, small repairs) | None | Nothing at risk; paid on completion. |
| Small material jobs (gutters, a door, a fence section, a water heater) | 25 to 33% | Covers the material you pick up on the way. |
| Trade jobs with a crew day committed (insulation, tree removal, paving, concrete) | 25 to 35% | Material plus the crew and equipment you committed before you show up. |
| Special-order or custom material (windows, cabinets, custom doors, stone) | 50% or the cost of the order | You cannot return it. The deposit is the order. |
| Remodels and additions over a few weeks | 10 to 20% + progress payments | Deposit for mobilization, then paid at milestones so nobody is ever more than a week exposed. |
| Commercial and GC work | Often 0 to 10%, with a pay schedule | Contracts run on draws and retainage; the schedule replaces the deposit. |
Deposit limits are set by state. Most states set no cap but require the deposit terms to be in a written contract. A few are strict, and they are the ones to know even if you never work there, because customers read about them online and assume they apply everywhere.
| State | Home improvement deposit rule |
|---|---|
| California | 10% of the contract price or $1,000, whichever is less, for home improvement contracts. |
| Maryland | No more than one third of the contract price at signing. |
| Massachusetts | No more than one third of the contract price, unless special-order materials cost more; then the deposit can cover them. |
| Most other states, including Tennessee | No fixed cap. The deposit and the payment schedule must be in a written contract the customer signed. |
Two things keep you safe everywhere: put the deposit amount and what it covers in writing, and never take a deposit for work you are not licensed or ready to start. A signed estimate that states the deposit, the balance, and the schedule is your protection if a job goes sideways. Check your own state contractor board before you set a house policy; this page is a contractor's plain-English guide, not legal advice, and the rules above were last checked in September 2026.
Past about two weeks of work, one deposit is the wrong tool. Break the job into milestones and get paid as each one lands, so you are never more than a few days of labor exposed. A schedule that customers accept without blinking looks like this:
| Milestone | Share of contract | Example on a $24,000 job |
|---|---|---|
| At signing (mobilization and first material) | 15% | $3,600 |
| Demo done, rough-in started | 25% | $6,000 |
| Rough-in inspected | 25% | $6,000 |
| Finishes installed | 25% | $6,000 |
| Punch list complete, final walk-through | 10% | $2,400 |
Print the schedule on the estimate. Each milestone becomes an invoice with a pay link on the day it lands. SayEstimate bills part of an approved estimate as its own invoice, so the schedule above is five taps over five weeks instead of five conversations.
Put in the job and what you spend before the first payment. It tells you the deposit that covers you and the percentage to print.
Most customers expect a deposit. The ones who balk are usually reacting to how it was asked, not the deposit itself. Frame it as the thing that holds their spot and pays for their material, because that is true: "The deposit covers your materials and holds your start date. The balance is due when the work is done and you are happy with it."
Put the number on a professional-looking estimate, not in a text that reads like you are short on cash. When the deposit sits on a signed document next to the scope and the total, it looks like standard business, because it is. A clean estimate does more to earn the deposit than any speech.
If a customer refuses any deposit on a material-heavy job, that is information. It can mean tight cash, and it can mean they have stiffed a contractor before. Offer a middle path: a deposit that covers materials only, with labor billed as the work is done. If they still refuse and you would be fronting real money, it is fair to walk. A job that starts with you financing the customer rarely ends well.
For customers who cannot pay a lump deposit, financing lets them proceed while you still get funded up front. SayEstimate offers monthly financing through Affirm, subject to approval, so the customer spreads the payments and your deposit lands on schedule.
Written by Terry "Hoss" Tenison runs an insulation business in Lawrenceburg, Tennessee, and built SayEstimate after too many evenings chasing money he had already spent on material. The deposit line on every SayEstimate estimate exists because of those evenings. More about Hoss →
Try the plain deposit calculator, read how to get paid faster and whether to charge for estimates, or see how the deposit gets collected at signing. All contractor guides →
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