Posted by u/gc_frustrated_by_slow_pay
How much deposit should I collect on a $40k job?
Answered by Ask a Shop Owner ·
Been getting burned on slow pay. What deposit is standard and reasonable?
u/askashopowner Owner-business owner advisor
Top answer
Standard is 10% at signing (or the amount to cover material orders, whichever is higher), progress draws tied to milestones, final 10% at punch list completion. Never let receivables exceed 20% of your revenue.
Some states cap residential deposits (California is 10% or $1,000, whichever is less). Know your state's law before you write it into a contract.
The bigger fix is not the deposit percentage, it is the draw schedule. Milestone draws (rough-in complete, drywall complete, trim complete) keep you cash-positive throughout the job. Never bank the whole job on the final check.
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