How much deposit should a contractor ask for?
Enough to cover the material you have to buy before the first day, and enough that the client is committed. For most residential jobs that lands between 10 and 30 percent. A few states put a legal ceiling on it, and those come first.
States that cap the deposit
These are the ones contractors run into most, as of September 2026. Laws change and this page is not legal advice: check your state's contractor board before you write a number.
- California: on a home improvement contract the down payment cannot exceed $1,000 or 10 percent of the contract price, whichever is less. Contractors State License Board rule.
- Maryland: a home improvement contractor cannot take more than one third of the contract price as a deposit.
- Massachusetts: the deposit on a home improvement contract cannot exceed one third of the total, apart from special-order materials.
- Most other states set no cap, but many require the deposit and the payment schedule to be written into the contract. Some require a registered contractor to hold deposits a certain way. Your state board's website will say.
What is normal where there is no cap
- Small repairs, one or two days: often no deposit. You are not buying much ahead of time and the client pays on completion.
- Jobs with material you have to order, like cabinets, windows, a fence: the cost of the material as the deposit, which often works out to 30 to 50 percent. Say that is what it is for.
- Multi-week jobs: a deposit of 10 to 30 percent, then progress payments at milestones you can point to. Rough-in complete. Drywall hung. The balance at the walk-through.
- New clients you do not know: lean toward the higher end. Repeat clients: whatever has worked before.
Never let the amount you are owed run far ahead of the work done. If the client walks at week three, you should be out a day, not a month.
How to word it on the estimate
One line, plain. "Deposit of $2,400 due at signing to order materials. Balance of $5,600 due on completion." Clients accept a deposit without argument when the estimate says what it is for. What they push back on is a number with no reason next to it.
For a job with progress payments, list each one with what triggers it, so there is nothing to argue about on the day.
Collect it the same day
A deposit that is "coming" is not a deposit. Send the invoice for it the moment the estimate is signed, with a card link, so the client can pay from their phone in the driveway. Waiting for a check is how a Monday start becomes a Thursday start.
Common questions
Can I ask for 50 percent up front?
Where the state allows it and the job has heavy material costs, yes, and many contractors do. Say what the money is for. In a capped state you cannot, whatever the material costs; you order later or the supplier bills the client directly.
Is the deposit refundable?
Say so on the estimate either way. A deposit spent on special-order material is normally not refundable once ordered; a deposit against labor usually is, less any work done. Write it down before it matters.
Should the deposit be a separate invoice?
Yes. It gives the client a record of what they paid and you a record of what is still owed, and the final invoice then shows the deposit as already paid.