Taking a deposit as a tradie: how much, and the rules by state

A deposit is the simplest way to stop a "yes" turning into a no-show. It covers materials you order for the customer's job, and it shows the customer is committed. But for residential building work, several states cap how much you can take, and the caps are lower than many tradies think.

This guide is general information, not legal advice. Rules change, so check your state regulator before you set your deposit terms.

For the consumer law side (fair deposits and the guarantees you can't sign away), read deposits and consumer guarantees.

The state caps for residential building work

New South Wales

Under section 8 of the Home Building Act 1989, the maximum deposit for residential building work is 10% of the contract price. For work where Home Building Compensation (HBC) cover is required (generally contracts over $20,000), you can't take a deposit until the cover is in place. NSW Fair Trading's guide to home building contracts has the detail.

Queensland

The QBCC sets the maximum deposit for domestic building work at 10% for contracts under $20,000, and 5% for contracts of $20,000 or more, with a higher limit where most of the work is done off-site (QBCC: deposits and progress payments).

Victoria

Consumer Affairs Victoria sets the maximum deposit for domestic building work at 10% for contracts under $20,000 and 5% for $20,000 and over (CAV: deposits and payments). Victoria's domestic building contract laws were amended in 2025 and the caps can be changed by regulation, so check CAV's page for the current figures before you rely on them.

Western Australia and other states

Western Australia and the other states and territories have their own home building rules. Check with Consumer Protection WA or your local fair trading office for the deposit limits that apply to your work.

Trade work that isn't "building work"

Many everyday trade jobs, such as replacing a hot water system or adding power points, may fall outside the residential building contract rules depending on the state and the value. There may be no fixed cap. Even so:

• Keep the deposit in line with your real upfront costs (materials and equipment ordered for the job).
• Put the amount and when it's due on the quote.
• Say what happens to the deposit if the job is cancelled.

A deposit that clearly covers materials is easy for a customer to accept. One that covers half the job before you've started is not.

Door-knocking and unsolicited sales

If you approach a customer at their home without being invited (or by phone) and agree a sale over $100, the ACCC's unsolicited consumer agreement rules apply. There is a 10 business day cooling-off period, and you generally can't take any payment or start work during it (ACCC: door-to-door sales).

If the customer contacted you first and asked for a quote, these rules usually don't apply. Keep a record of how the job came in.

Progress payments

For bigger jobs, a small deposit plus progress payments works better than a large deposit. Tie each payment to a stage the customer can see: slab poured, frame up, lock-up, completion. In the states with building caps, progress payments also need to match work actually done.

Card payments and fees

Taking a deposit by card on acceptance is the fastest way to lock in a job. Card surcharges on Visa, Mastercard, eftpos and American Express are banned from 1 October 2026 (RBA announcement), so you can't add the card fee on top. Build it into your price instead. See the card surcharge ban guide and how to price a job.

How to ask for a deposit

Keep it plain and put it on the quote:

A 10% deposit of $2,898.50 secures your start date and lets us order your materials. The balance is due in stages as listed below.

Then make paying easy. With Karven, the customer accepts the quote on their phone and can pay the deposit by card straight away (a small online payment fee applies), so you're not chasing a bank transfer.

What to write about the deposit

Put these on the quote, in plain words:

• The amount, in dollars and as a percentage.
• When it's due, for example "on acceptance" or "within 3 days of accepting".
• What it's for, for example "secures your start date and covers materials ordered for your job".
• What happens if the job is cancelled, and by whom. If you've already ordered custom materials, say that the cost of those materials may be kept.
• How the rest is paid, stage by stage, so the deposit isn't the only payment the customer knows about.

Customers are far more relaxed about paying a deposit when they know exactly what it covers.

When a customer won't pay a deposit

Some customers push back, especially on small jobs. A few options:

• Drop the deposit for small jobs with no special-order materials, and take payment on completion instead.
• Ask the customer to pay for special-order materials directly, or on delivery.
• For bigger jobs, keep a small deposit and use more progress payments.

A customer who won't commit anything to a big job may not be committed to the job at all. That's useful to know before you order materials.

Checklist

• Check whether the job is residential building work in your state
• Stay within the cap (10% NSW; 10% or 5% QLD and VIC depending on the contract value)
• In NSW, have HBC cover in place before taking a deposit where it's required
• No payment during the cooling-off period on unsolicited sales
• Put the deposit amount, due date and refund terms on the quote
• Price card fees in; no surcharge

This guide is general information, not legal advice. Check with NSW Fair Trading, the QBCC, Consumer Affairs Victoria or your state's fair trading office.