Deposits vs partial payments: what contractors should charge before a job
A deposit locks in your calendar and covers first materials before a wrench touches the job. A partial (progress) payment collects cash for work already done. Confusing the two — or over-collecting past a state deposit cap — leaves contractors underfunded mid-job or in violation of consumer-protection law. Here's how to size each one and invoice it correctly.
Deposit vs. partial payment: what's the difference
A deposit is money collected before work starts, to reserve your schedule and fund first materials; a partial (progress) payment is money collected mid-job, tied to work already completed. A deposit protects the start of a project. Progress payments protect the middle — the stretch where contractors most often end up floating labor and materials out of pocket.
Both get used together on most jobs of any size: collect a deposit to start, bill one or more progress payments as phases finish, then collect the final balance at completion. Each is credited against the total contract price, not billed as an extra fee — a client who pays a $500 deposit on a $5,000 job owes $4,500 at the end, not $5,000. The invoice should always show what's been paid against what's still owed, not just a flat "amount due."
Skip the deposit on a job needing special-order materials and you're financing the client's cabinets or windows until they pay. Skip progress billing on a multi-week job and you're covering payroll for weeks before the next dollar arrives. Neither is optional once a job crosses a few thousand dollars or a couple of weeks.
How much deposit should you charge?
There's no single right number — it depends on job size, materials, and what your state allows. Here's the range contractors actually work with:
| Job type / size | Typical deposit range | What drives it |
|---|---|---|
| Small repair / same-day service call (under ~$1,500) | $0 — often no deposit | Fast turnaround and low material outlay make a deposit more overhead than protection |
| Mid-size single-trade job (~$1,500–$15,000) | 10%–30% | Covers the first materials order and reserves the calendar slot |
| Large remodel / multi-trade job ($15,000+) | 10%–20% upfront, remainder via progress payments | Risk shifts to milestone billing; over 50% upfront is a red flag |
| Custom / special-order work (cabinets, windows, fixtures) | Sized to the material cost | Covers non-returnable materials ordered before work starts |
| State-capped home improvement contracts (e.g. California, Nevada) | 10% of contract price or $1,000 — whichever is less | Statutory consumer-protection limit, not negotiable |
Ranges reflect contractor and consumer-advocate guidance current as of 2026-08-01. California's cap is Business & Professions Code §7159 (10% of the contract price or $1,000, whichever is less). Nevada, Maryland, Massachusetts, and Arizona impose their own statutory deposit limits — confirm the current threshold with your state's contractor licensing board before you quote.
When to require a deposit — and when to skip it
Require a deposit when...
The job needs special-order materials, runs more than a week or two, involves a new client with no payment history, or your state's contract rules require written deposit terms anyway. It's also the cheapest way to confirm a client is serious — before you've ordered materials, not after.
Skip the deposit when...
It's a same-day service call using stock materials you already carry, the job total is small enough that a deposit invoice costs more admin time than it protects, or the client is a repeat customer with an established payment pattern.
Honest scope: this isn't a substitute for your state's contractor licensing rules or a written contract. Deposit caps and disclosure requirements vary by state and contract type — verify the current rule before you quote a percentage, especially on a home-improvement contract with a homeowner.
How to actually invoice and collect a deposit
A deposit that lives in a text message or handshake is hard to enforce and easy to dispute later. It needs to be on the same invoice as the job, with the balance tracked automatically.
- ✓ Send one invoice for the full job total — the deposit isn't a separate quote, it's a partial payment against that total.
- ✓ Record the deposit as it's paid — cash, check, or a card you run — and the invoice shows a "Partial" badge with the remaining balance tracked automatically.
- ✓ Bill progress payments or the final balance on the same invoice; Logged auto-promotes it to Paid once the full amount is collected.
- ✓ If the balance sits unpaid, Logged auto-emails the client a reminder 7 days after you send the invoice (Pro) — so you're not the one chasing it.
- ✓ Works offline — record a cash or check deposit on-site with no signal; it syncs when you're back online.
One note on cards: the Stripe "Pay Now" button on the invoice (Pro) charges the full invoice total and marks it paid — so it's how a client settles the whole invoice by card. Record a partial deposit yourself and let Logged track the balance.
Honest scope: Logged is a solo-operator invoicing app, not a construction-draw or lien-waiver platform. It tracks deposits and partial payments against an invoice total — it doesn't manage multi-party draw schedules, retainage, or subcontractor lien waivers. For a solo contractor billing a homeowner directly, that's the whole job; commercial work with AIA-style draw requests needs a dedicated construction-billing tool.
What it costs to collect a deposit
Collecting a deposit costs nothing extra if you take cash, check, or a P2P app — a card payment through an invoicing app runs standard processing fees on top of the app's own price. Standalone processors and apps with built-in "Pay Now" charge roughly the same card rate; the difference is whether the payment reconciles against the job automatically.
| Collection method | Typical cost | Tradeoff |
|---|---|---|
| Cash or check | $0 | No fee, but no automatic paper trail — recorded manually |
| P2P apps (Venmo, Zelle) | $0 (personal accounts) | Fast, but commingles business and personal money |
| Standalone payment processor | ~2.6%–3.5% + $0.10–$0.30/transaction | No monthly fee, but lives outside your invoice records |
| Invoicing app with payment tracking (Logged Pro) | $9.99/mo or $89.99/yr + Stripe processing | Partial deposits recorded manually with the balance auto-tracked; full invoice also payable by card |
Card-processing ranges reflect standard published rates for common processors as of 2026-08-01; your actual rate depends on your processor and card type. See full Logged pricing →
Common questions about contractor deposits
How much of a deposit should I charge as a contractor?
Is there a legal limit on how much I can ask for as a deposit?
What's the difference between a deposit and a progress payment?
Should I always require a deposit before starting a job?
How do I invoice a deposit and then bill the remaining balance?
Bill the deposit, track the balance
Free to download. One invoice, the deposit and progress payments recorded as they come in, and the balance tracked automatically until the job's paid in full.
Related guides
Built for other trades
Last verified: 2026-08-01.
Maintained by Warner Creates LLC. Pricing and feature details verified against the live Logged app and its App Store and Google Play listings.