How much deposit can a tradie ask for?

There is no single national cap on trade deposits, but some states limit deposits for residential building work, often to a set percentage of the contract price, with lower caps on larger jobs. A deposit also has to be reasonable rather than a penalty. The safe approach is to keep deposits modest and tied to genuine upfront costs, and to check your state's building rules for any specific cap on residential work.

What are consumer guarantees under Australian Consumer Law?

Under the Australian Consumer Law, services must be provided with due care and skill, be fit for any purpose the customer made known, and be delivered within a reasonable time. Goods you supply must be of acceptable quality. These guarantees apply automatically and cannot be signed away by a term in your quote. If you fall short, the customer has rights to a remedy.

Can I keep a deposit if the customer cancels?

It depends on why they cancelled and what you had already spent. You can generally keep enough to cover genuine costs and losses you reasonably incurred, but keeping a large deposit as a penalty when you have done little is risky and can breach consumer law. Spell out in your terms what happens to the deposit on cancellation, and keep it fair and tied to actual costs.

Do I have to fix defective work for free?

If the problem is a failure to meet a consumer guarantee, for example work not done with due care and skill, the customer is entitled to have it remedied. For a minor problem you can usually choose to fix it. For a major failure the customer may be able to choose between a fix, a refund or compensation. Standing behind your work promptly is usually cheaper than the alternative.

Can my terms exclude consumer guarantees?

No. The consumer guarantees in the Australian Consumer Law apply automatically and a term that tries to exclude, restrict or modify them is generally void. You can set fair commercial terms around scope, price, deposits and timing, but you cannot contract out of the basic guarantees of care, skill and acceptable quality.

Consumer law

Deposits and consumer guarantees: what tradies must get right

Taking a deposit and standing behind your work are both governed by consumer rules. Here is what tradies should know about fair deposits and consumer guarantees.

Updated 2026-06-07 · General guidance, not legal advice

Two things sit either side of a job: the deposit you take at the start and the work you stand behind at the end. Both are shaped by consumer rules in Australia, and both are easy to get wrong if your terms are vague. Getting them right protects your cash flow without exposing you to a dispute. This is general guidance, not legal advice, so check your state's rules and the Australian Consumer Law for the detail.

Fair deposits

A deposit is meant to cover your genuine upfront costs and show the customer is committed. It is not meant to be a penalty or a way to hold money you have not earned. A few principles keep you on solid ground:

Keep it reasonable. A deposit tied to real upfront costs, materials ordered, scheduling, is defensible. A large deposit on a job you have barely started is not.
Watch state caps. Some states limit deposits for residential building work, often to a set percentage of the contract price, with lower caps as the job value rises. Check your state's building authority for any cap that applies to your work.
Say what happens on cancellation. Your terms should state clearly what you keep and what you refund if the customer pulls out, and that retained amount should reflect your actual costs, not a penalty.

Put the deposit amount, what it covers, and the cancellation position in writing on the quote. A clear term beats an argument later.

Consumer guarantees you cannot sign away

The Australian Consumer Law gives every customer a set of consumer guarantees that apply automatically. For trade work the key ones are:

Services must be provided with due care and skill, be fit for any purpose the customer told you about, and be delivered within a reasonable time.
Goods you supply must be of acceptable quality.

The important part: these guarantees cannot be excluded by a term in your quote or contract. A clause that tries to sign them away is generally void. You can set fair commercial terms around scope, price, deposits and timing, but the baseline guarantees ride along regardless.

When something goes wrong

If your work fails to meet a consumer guarantee, the customer is entitled to a remedy. Broadly:

For a minor problem, you can usually choose to fix it within a reasonable time.
For a major failure, the customer may be able to choose between having it fixed, a refund, or compensation for the drop in value.

In practice, dealing with a genuine defect quickly and without drama is almost always cheaper and better for your reputation than letting it escalate. Keep your scope and variations well documented so it is clear what you agreed to deliver, which makes it far easier to show when a complaint is about scope rather than quality.

Where clear terms do the work

Most deposit and guarantee disputes come down to terms that were never written down clearly. The fix is to make your quote carry fair, plain-English deposit and cancellation terms every time, with a scope clear enough that "what was agreed" is never in doubt. A quoting tool that builds those terms into every document, and keeps the scope and any variations on the record, means you take deposits with confidence and stand behind your work on your terms, not in an argument. For the specific deposit caps and consumer-law remedies that apply to you, check your state building authority and the ACCC guidance.

Frequently asked questions

How much deposit can a tradie ask for?: There is no single national cap on trade deposits, but some states limit deposits for residential building work, often to a set percentage of the contract price, with lower caps on larger jobs. A deposit also has to be reasonable rather than a penalty. The safe approach is to keep deposits modest and tied to genuine upfront costs, and to check your state's building rules for any specific cap on residential work.
What are consumer guarantees under Australian Consumer Law?: Under the Australian Consumer Law, services must be provided with due care and skill, be fit for any purpose the customer made known, and be delivered within a reasonable time. Goods you supply must be of acceptable quality. These guarantees apply automatically and cannot be signed away by a term in your quote. If you fall short, the customer has rights to a remedy.
Can I keep a deposit if the customer cancels?: It depends on why they cancelled and what you had already spent. You can generally keep enough to cover genuine costs and losses you reasonably incurred, but keeping a large deposit as a penalty when you have done little is risky and can breach consumer law. Spell out in your terms what happens to the deposit on cancellation, and keep it fair and tied to actual costs.
Do I have to fix defective work for free?: If the problem is a failure to meet a consumer guarantee, for example work not done with due care and skill, the customer is entitled to have it remedied. For a minor problem you can usually choose to fix it. For a major failure the customer may be able to choose between a fix, a refund or compensation. Standing behind your work promptly is usually cheaper than the alternative.
Can my terms exclude consumer guarantees?: No. The consumer guarantees in the Australian Consumer Law apply automatically and a term that tries to exclude, restrict or modify them is generally void. You can set fair commercial terms around scope, price, deposits and timing, but you cannot contract out of the basic guarantees of care, skill and acceptable quality.

Let your quoting tool handle the fine print

Karven bakes Australian quoting basics into every document: GST done right, clear deposit and progress-claim terms, your ABN and licence on the page. Spend the time on the job, not the paperwork.

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