How much should you pay a contractor upfront?
How much you pay, and when, is one of the biggest sources of contractor disputes — and one of the easiest ways to get burned. A reasonable payment schedule protects both sides. A lopsided one protects only the contractor.
Here's what's normal and what should make you walk.
The deposit: 10% or less
A reasonable deposit is around 10% of the project, or enough to cover initial materials — whichever is smaller. Several states legally cap deposits at 10%. You should almost never pay 30%, 50%, or more upfront. A large deposit demand often signals a cash-flow problem (they need your money to finish someone else's job) or worse.
Pay on milestones, not on faith
The rest of the money should be tied to progress, not the calendar. A healthy schedule pays out as defined milestones are completed — for example: deposit, then a payment after demo and rough-in, another after major installation, and the final payment at completion.
This keeps the contractor motivated and means you're never paid far ahead of the work done.
Hold a final retainage
Keep the last ~10% until the punch list is finished and you've confirmed the work passes inspection. That final payment is your leverage to get the little things finished right. Pay it all early and that leverage is gone.
Payment red flags
- A demand for a large percentage upfront before any work begins.
- Cash-only, with no receipts or paper trail.
- Being asked to pay for materials that haven't been ordered or delivered.
- A schedule where you're always paid ahead of the actual work completed.
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Check my quote freeFrequently asked questions
How much should I pay a contractor upfront?
Around 10% of the project or the cost of initial materials, whichever is less. Some states cap deposits at 10%. Avoid paying 30%+ before work begins.
Is it normal to pay a contractor in full before the job is done?
No. Hold back roughly 10% until the work is complete and passes inspection. Paying in full early removes your only leverage to get punch-list items finished.
What's a normal contractor payment schedule?
A small deposit, then payments tied to completed milestones (such as demo, rough-in, and installation), with a final retainage paid at completion.