Asking for a deposit is normal. It lets a small business order materials and hold a spot on the calendar. But "how much should I pay up front?" is one of the most-searched home improvement questions for a reason: an oversized deposit is the most common way homeowners lose money to a contractor who never comes back. In a 2026 homeowner survey, about a third named unclear or unexpected costs as their top frustration with contractors.
What's a normal contractor deposit?
- Small repairs and service calls: often no deposit at all. You pay when the job is done.
- Typical remodeling and installation jobs: about 10% to 33% up front, then progress payments as work is finished.
- Jobs heavy on custom materials (cabinets, windows, special-order doors): a larger deposit can be reasonable, but it should match the materials cost, and you should get the order confirmation or receipt.
- 50% or more before any work starts: a red flag on most residential jobs, and illegal in some states.
State laws that limit contractor deposits
Several states cap how much a contractor can collect before work starts, or put rules on how that money is held. Here are the ones homeowners ask about most:
| State | The rule |
|---|---|
| California | Down payment can't exceed $1,000 or 10% of the contract price, whichever is less, on home improvement contracts. Asking for more is a misdemeanor. |
| Nevada | Same cap on residential work: the lesser of $1,000 or 10% of the contract price. |
| Maryland | Home improvement deposits are capped at one-third of the contract price (Md. Code, Business Regulation § 8-617). |
| Massachusetts | Home improvement deposits generally can't exceed one-third of the total, except for special-order materials. |
| Florida | No cap, but if a contractor takes more than 10% up front, state law sets deadlines to apply for permits and start work, and taking money without doing the work can be a crime. |
| New York | No percentage cap, but payments taken before the work is done must be deposited in escrow or bonded, and progress payments should match the work completed. |
| Texas | No percentage cap, but money paid for improvements to your home is treated as trust funds under state law and must be used for your project. |
| Virginia | No hard cap. State consumer guidance suggests an initial deposit of no more than 10% or $1,000, whichever is less, with more allowed for custom or special-order items. |
Many other states have no specific cap. Check with your state attorney general's consumer protection office or your contractor licensing board before you sign.
A fair payment schedule (example)
For a $12,000 bathroom remodel, a schedule like this keeps your payments roughly in line with the work done:
- Deposit at signing: 10% to 20%, or the legal cap in your state.
- After demolition and rough-in (plumbing and electrical in place, inspection passed): about 30%.
- After tile, fixtures and vanity are installed: about 30%.
- Final payment after a walkthrough and your punch list is complete: the rest, often 10% to 20%.
Tie each payment to a visible milestone, not a date. If a payment comes due and the work isn't there, you're not behind on your bill; they're behind on the job.
How to protect your deposit
- Check the license first. In many states, only licensed contractors give you access to bond claims or a state recovery fund. Here's how to check one.
- Pay by credit card or check, never cash. A card can give you chargeback rights if nothing is delivered.
- Make the check out to the business named on the license and contract, not to an individual.
- Get a written contract with the total price, payment schedule, start and finish dates, and a materials list.
- Ask for lien waivers with each payment on bigger jobs, so suppliers and subcontractors can't place a lien on your home if the contractor doesn't pay them.
- Know your cancellation right. If you sign at home, the FTC's Cooling-Off Rule usually gives you three business days to cancel many sales over $25.
For contractors: how to ask for a deposit without losing the job
Homeowners are wary of big up-front payments, so explain yours. Show what it pays for (materials, permits, scheduling), stay within your state's cap, put the schedule in writing, and send photos of delivered materials. A clear, fair deposit policy on your website and your Great Local Pros profile builds trust before the first call.