How Much Deposit Is Too Much?

Understanding Contractor Payment Schedules Without Getting Burned

Hiring a contractor can feel like a leap of faith — especially when money’s on the table. You want to trust them, but that moment they say, “I’ll need a deposit up front” often leaves homeowners asking:

How much is normal? What’s legal? And how do I protect myself without offending someone?

This article breaks it down — no preaching, no scare tactics. Just clear, real-world information to help you make smart decisions.

What’s a “Normal” Contractor Deposit?

While it varies depending on your location and project type, here’s a general breakdown that’s widely referenced by homeowner education sites, legal advisors, and state contractor boards:

Project Type	Typical Deposit
Minor handyman work	Often no deposit required
Mid-range jobs ($3k–$15k)	10%–30% up front
Larger remodels or builds	10%–20% initially, then progress payments
Custom materials orders	May require material costs up front

(This isn’t legal advice or a hard rule — just the commonly accepted range mentioned by consumer protection sources, state guidelines, and legal best practices. When sharing guidance on money, especially online, it’s important to cover your tracks and note that every case is different.)

Red Flags — When the Deposit Is Too High

Be cautious if a contractor asks for:

• More than **30% upfront** without a detailed breakdown

• Full payment before** any work begins

• Cash only**, especially without receipts

• A rushed agreement with a **vague or missing contract**

This doesn’t always mean it’s a scam — but it should make you slow down and ask questions. Reputable contractors explain their structure without pressure.

What a Solid Payment Schedule Looks Like

A good payment plan usually looks something like this:

1. Deposit — Often 10%–30%, especially for materials

2. Progress payments — Tied to specific milestones, not just dates

(e.g., after demo, after drywall, after cabinets installed)

3. Final payment — Held until the job is complete and walkthrough approved

Always tie payments to work completed, not just time passed.

Always Put It in Writing

Even on smaller jobs, get a basic written agreement that includes:

• Total cost

• Deposit amount

• Payment schedule (with dates or milestones)

• Who is responsible for materials

• Start and completion dates (even if estimated)

If a contractor says, “We don’t do contracts,” that’s a major red flag.

But What If You're Still Not Sure?

You can still protect yourself without making it confrontational. A few tips:

• Use **credit cards** for deposits when possible (some added fraud protection)

• Get **receipts** for every payment, no matter how small

• Don’t feel pressured to pay until you understand the breakdown

• Take before/after photos at each stage, just for your own records

These aren’t just for “bad contractors” — they’re smart habits for any job.

What Do the Laws Say?

In some states, like California, licensed contractors can’t ask for more than 10% or \$1,000 — whichever is less — as a deposit.

Other states, like Florida, don’t set exact numbers, but courts and regulators often refer to the 10–30% range as reasonable industry practice.

(Again — this isn’t legal advice. Always check your state’s contractor laws or licensing board if you want specifics.)

Final Thought

Most contractors are honest and just want to get started. But the money conversation is where a lot of misunderstandings begin — and sometimes, where homeowners lose control of the project.

You’re not being difficult by asking questions. You’re being smart.

If the deposit feels high or the answers feel rushed, take a breath, take notes, and don’t be afraid to walk away.