How Much Deposit Should I Charge Before Starting Work?

Asking for money before you start work feels awkward the first few times. It should not. A deposit is not a favour you are asking for — it is part of the price, paid early. It reserves your time, covers the materials you have to buy, and tells you early whether the customer is serious. If someone will not put anything down, that is useful information before you have done the work, not after.

1. How much deposit should I ask for?

There is no single correct figure, but the range most small businesses use is 25% to 50% of the total, paid before work starts. Small, quick jobs often need more upfront — sometimes the full amount — because the sum is small and chasing it afterwards is not worth your time. Large, multi-week jobs work better with milestone payments instead of one big deposit, for example a third to start, a third halfway, and the rest on delivery.

Type of work	Common deposit	Why
Small, quick job	50% to 100% upfront	The amount is low, so it may not be worth chasing after the work is done.
Standard project (a few weeks)	25% to 50%	Covers the start of the work and reserves your time.
Work where you buy materials	At least the cost of the materials	You are not out of pocket if the job stops.
Custom goods you cannot resell	50% or more	A cancelled order leaves you with stock nobody wants.
Large, multi-month project	Milestones, e.g. 30% / 40% / 30%	Spreads the risk and keeps cash coming in as you work.
Event or a fixed date	25% to 50% to hold the date	You turn other bookings away once the date is taken.

A new customer with no track record with you is a good reason to aim high — 50% rather than 25%. You have no history to tell you they will pay, so you should be exposed to as little unpaid work as possible. With a customer who has paid you on time for years, you can be more flexible.

2. What should the deposit cover?

Use one simple test: if the customer walked away the day after you started, what would you have lost? The deposit should cover at least that. Add up the materials you have to buy before you can begin, any subcontractor or booking cost, and the hours you will spend in the first stage. If that total is more than 50% of the job, say so plainly — the deposit exists to cover real costs, not to test the customer's trust.

That test also protects you from asking for too much. A deposit of 80% or 90% reads as a red flag to most customers and kills trust, unless the job is small enough that full payment upfront is normal. The sweet spot for most trades is about a third down. If your price is right in the first place, the deposit maths is easy — see how to price a small business service without guessing.

3. What to write down before you take it

Never take a deposit on a handshake. Before the money moves, put these five things in writing — in the quote, the contract or the deposit invoice itself:

• The total price, the deposit amount, and what is left to pay.
• When the rest is due — on delivery, on completion, or at agreed milestones.
• What the deposit covers, and whether it is refundable if the customer cancels before work starts.
• What happens if the job changes — extra work, extra materials, a new date.
• How the customer pays, and when the money must arrive for work to begin.

Send a proper invoice for the deposit, not just a bank transfer request. It should show the deposit as part of the total price, not as a separate charge, so the final invoice is simple: total, less deposit already paid, balance due. Our guide to writing an invoice that gets paid on time covers what must be on it.

4. A simple script for asking

Frame the deposit as your standard process, not something special for this customer. That one change removes most of the awkwardness:

"To get started, I take a 50% deposit to book your project into my schedule and cover the first stage of work. I'll send the invoice over now, and once that's in, your start date is locked in."

If they hesitate, explain it in one sentence: "The deposit reserves your time and covers the cost of starting, so I'm not buying materials out of my own pocket before the job begins." Most customers accept that immediately — they have paid deposits themselves for builders, photographers and wedding venues. If someone pushes back hard on any deposit at all, treat that as information about how the rest of the job will go.

5. When not to start work yet

Wait until the deposit has actually landed before you start. Starting early removes the deposit's main job, which is confirming the customer is committed and able to pay. Buying materials, booking a date or turning other work away before the money arrives is exactly the risk the deposit exists to remove. A short wait — a day or two for a bank transfer — is normal, and a serious customer will not mind it.

The same discipline helps your cash flow for the whole job. A deposit in the bank means you are not financing the customer's project out of your own pocket while you wait for the final invoice. If cash timing is your wider problem, read cash flow basics for a small business — profit and cash in the bank are not the same thing.

6. Refunds, caps and the law — check first

Some places limit how much deposit a business may take from a customer for certain kinds of work, such as home building or travel. For example, California caps contractor deposits at $1,000 or 10% of the contract price, whichever is less, for home-improvement work. Other states and countries have their own rules, and they change — so check the rule for your trade and your area before you set a standard percentage, and say clearly in writing whether the deposit is refundable if the customer cancels before work begins.

If the job is big enough that you are thinking about borrowing to buy materials first, read what to check before you borrow instead — a deposit from the customer is usually cheaper than a loan.

Sources for the ranges in this guide: Invoice Simple — How to Ask for a Deposit and Billable — Should Freelancers Ask for a Deposit? This guide is general information, not legal advice.

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