How do deposits and progress payments work for tradies?

Ask for a deposit of around 10-30% on small and mid-sized jobs, then bill the rest in stages tied to finished work. On domestic building work, state laws cap the deposit you can take (as low as 5% on larger contracts), so check your state's rule before you quote. Either way, put the amounts and trigger points in writing before you start.

Should a tradie ask for a deposit?

Yes, when the job has material costs, special orders or a long timeline. A deposit covers your upfront spend and shows the customer is committed. Skip it on quick callouts and repairs, where "due on completion" is simpler.

A common rule of thumb for non-building trades:

Job type	Typical deposit	Then
Small repair or callout	None	Pay on completion
Job with special-order materials	Enough to cover the materials	Balance on completion
Multi-day job	20-30%	Balance on completion or in stages
Multi-week job	10-20%	Progress claims at set milestones

These are rules of thumb, not legal limits. For anything that counts as residential building work, the law sets the ceiling.

Is there a legal limit on deposits?

For domestic building work, yes, and it differs by state. As of October 2026, Consumer Affairs Victoria says a deposit can be no more than 10% if the contract is under $20,000 and 5% if it is $20,000 or more. Queensland has a similar structure for most domestic building contracts, and the QBCC publishes its own rules, including exceptions. NSW has its own cap under its home building laws.

Because the percentages, thresholds and exceptions change, read your state regulator's current page before you set a deposit on a building contract: Consumer Affairs Victoria, the QBCC in Queensland, or NSW Fair Trading. Smaller trade jobs that aren't domestic building work are usually a matter of what you agree with the customer.

What are progress payments?

Progress payments are part-payments you claim as the job reaches agreed stages, instead of one bill at the end. They suit jobs that run for weeks, because you aren't funding labour and materials from your own pocket the whole time.

Tie each payment to something the customer can see, not to a date alone. For example, on a bathroom renovation:

1. Deposit on acceptance: 10%
2. Demolition and rough-in complete: 30%
3. Waterproofing and tiling complete: 30%
4. Fixtures fitted: 20%
5. Final inspection and handover: 10%

Write the stages on the quote, so the customer agrees to them up front. Our guide to payment terms for tradies covers how to word them.

How do I invoice a deposit and progress payments?

Issue a separate invoice for each payment, and label it clearly: "Deposit, 10% of quote Q-0142" or "Progress claim 2 of 5, rough-in complete". Show the total contract price, what has been paid, and what is still owing.

Here is a worked example for a $11,000 job including GST ($10,000 plus $1,000 GST):

Invoice	Amount (inc GST)	GST in that amount
Deposit, 20%	$2,200	$200
Progress claim, 50%	$5,500	$500
Final, 30%	$3,300	$300
Total	$11,000	$1,000

Each invoice adds up to the full contract, so keep the quote number on every one. If you're GST-registered, invoices of $1,000 or more need to be tax invoices; see what a tax invoice must show. Invogo adds GST and your ABN to every invoice automatically, and the free plan covers 5 invoices or quotes a month.

When do I pay GST on a deposit?

It depends on your GST accounting method. On a cash basis, which the ATO makes available to businesses under $10 million turnover, you report GST in the BAS period you receive the payment. A deposit or progress payment is reported when the money arrives, not when you send the invoice.

On a non-cash (accruals) basis, you report GST in the earlier of the period you issue the invoice or receive any payment. A progress claim can therefore trigger GST before the customer has paid.

If you're not sure which method you use, ask your accountant or check your BAS. Our guide to calculating GST shows how to split a total into price and GST.

What if a customer won't pay a progress claim?

Stop work only if your contract or the law allows it, and follow the process in order. Send a reminder, then a firm follow-up, using the steps in how to chase overdue invoices. Every state also has security of payment laws for construction work, with strict deadlines for payment claims, so get advice quickly if a large claim is disputed.

Keep records of every quote, variation, invoice and payment. Clear paperwork is your best protection if a dispute starts.

How do I keep track of what's been paid?

Use one place for the quote, the staged invoices and the payments received. Invogo links invoices to quotes and tracks payments, so you can see what each customer has paid and what is overdue. Pro is A$9.99/month or A$99.99/year and adds unlimited invoices and automatic reminders. You can start free here.

This is general information, not advice. Check your state regulator's rules and talk to your accountant or the ATO about your situation.