How do you charge a deposit?
Charge a deposit by specifying the amount or percentage on your estimate or invoice, then collect it before work starts. This post covers deposit best practices, collection methods, and how to structure them for different job sizes.
Decide your deposit percentage upfront
Most contractors charge 25 to 50 percent of the total job cost as a deposit. Smaller jobs often need 50 percent. Larger jobs—say a $15,000 roof replacement—might be 25 to 33 percent. The deposit should cover your material costs plus initial labor. If you're buying $4,000 in shingles before the crew shows up, your deposit needs to account for that. You set this rule at estimate time, not after the customer signs. Write it directly on the estimate: "Deposit due before work begins: $2,400 (50% of $4,800)." This removes confusion and sets expectations early.
Collect payment before you start work
The deposit sits in your account untouched until you begin the job. For a three-day concrete pour, you collect the deposit before day one. For a six-week remodel, same rule. If you start work without payment, you've already lost leverage. Customers know they can delay or skip payment after you're on the property. Make deposit collection a scheduling gate: the job doesn't get booked until the payment clears. This also catches bad checks or declined cards before your crew is standing idle on the site.
Offer digital payment to speed collection
Phone calls and checks slow deposits down. Provide a payment link customers can click to pay by card or ACH transfer. Most customers will pay immediately if it's easy. ACH transfers (bank-to-bank) cost you nothing and clear in one to two days. Card payments clear faster but cost you 2 to 3 percent in processing fees. Many contractors build this fee into their pricing or split it with the customer. Digital payment also creates a paper trail. You have a receipt, a timestamp, and proof the customer authorized it—useful if disputes come up later.
Document the deposit on your invoice
The initial invoice should show the deposit as a line item and note the date it was received. Example: "Deposit received 3/15: -$2,400." When you invoice for the balance, show what's left to pay. If the job is $4,800 total and the deposit was $2,400, the final invoice shows "Balance due: $2,400." This clarity prevents arguments about what's been paid. If change orders pop up during the job, handle those separately—they're new costs, not part of the original deposit agreement.
Bottom line
Set your deposit percentage (usually 25 to 50 percent) on the estimate, collect it digitally before work starts, and document it on the invoice. This keeps cash flowing and eliminates deposit confusion.