How to Charge Deposits on Quotes (Complete Guide)

Deposits protect your cash flow, reduce the risk of ghosting clients, and signal that you run a real business. Here is exactly when to charge one, how much to ask for, and how to write it into your quote so clients say yes.

Every tradesperson, freelancer, and service business hits the same question eventually: should I charge a deposit, and if so, how much? Get it right and you protect your cash flow, cover your upfront material costs, and filter out tyre-kickers before they waste your time. Get it wrong and you either lose jobs to competitors who charge less, or you end up funding the client's project from your own pocket until they pay.

This guide covers when to charge a deposit, how much to ask for, how to structure payment stages for larger jobs, how to write the deposit into your quote professionally, and the common mistakes tradies make that either cost them clients or cost them money.

Why you should charge a deposit

Deposits do five things for your business. They confirm the client is serious, they fund your upfront material costs, they signal that you are a legitimate business, they protect you if the client disappears, and they improve your cash flow by bringing money forward in the project timeline.

That last point matters more than most tradies realise. If you run a six-week bathroom renovation with no deposit and 30-day payment terms, you are personally funding materials and labour for two to three months before you see any money. That is a huge amount of working capital tied up, and it is the number one reason small trade businesses run into cash flow problems.

When you should charge a deposit

Not every job needs a deposit. Here is a practical rule of thumb for when to ask.

• The job is over 2 to 3 days of work, or spans more than a week of calendar time
• You need to order materials up front (tiles, sanitaryware, specialty fittings, custom parts)
• The client is new and has no track record with you
• The job involves specialist labour or sub-contractors you need to commit to in advance
• The total quote is above a threshold you set, for example anything over $1,000 / R 15,000 / £800
• You are travelling a long distance or blocking out significant calendar time for the job

For small, same-day jobs with an established client, skip the deposit and just invoice on completion. Asking for a deposit on a $150 tap repair for a repeat customer feels petty and can damage the relationship. Match the deposit to the risk.

How much to charge

The right deposit amount depends on the job, but here are typical ranges that clients accept without pushback.

• 10 to 20 percent for smaller jobs where materials are a small part of the total
• 25 to 33 percent for medium jobs or where you need to order materials in advance
• 50 percent for larger jobs, custom work, or long-duration projects
• Full material cost plus 10 to 15 percent for jobs where materials are the main cost (tile supply, high-end fixtures, custom joinery)

One common structure for bigger work is 50 percent deposit, 25 percent at the halfway mark (agreed milestone), and the remaining 25 percent on completion. This keeps your cash flow aligned with your actual costs at each stage of the job.

Another structure is 33 percent on acceptance, 33 percent when materials arrive on-site, and 34 percent on completion. This works well for projects where the client wants visibility that their money is being used to progress the job.

How to write the deposit into your quote

The deposit should not be a surprise. It should appear on the quote before the client accepts, in the payment terms section, clearly worded and impossible to miss. A free deposit calculator works out the deposit amount and what is left to invoice as you build the quote.

A clean payment terms line looks like this:

• A 30 percent deposit is required on acceptance to secure the booking and order materials. Work will be scheduled once the deposit is received.
• 50 percent payable on acceptance, 25 percent on completion of structural work, 25 percent on final hand-over. All payments due within 7 days of invoice.
• Full materials cost ($X,XXX) payable on acceptance. Labour charges invoiced on completion and payable within 14 days.

Notice that each version states both the amount and what it is for. Clients accept deposits more easily when they understand what the money is being used for. 'To order materials and secure your slot in our schedule' is much more palatable than a blank 'Deposit required'.

How to handle pushback

Some clients will ask you to waive the deposit or reduce it. Here is how to respond without losing the job or caving in.

If a client says 'I don't normally pay deposits', explain it in business terms. 'The deposit covers the materials I need to order for your specific job. I can't hold stock for every enquiry, so the deposit confirms we're both committed. Once I have it, your job is in my schedule and your materials are on order.'

If a client offers to pay more at the end instead of up front, decline politely. Cash flow is not the same as total revenue. You need the money at the point you have to spend it. Explain this honestly: 'I have to pay my supplier before I can start, so the deposit is timed to cover that. It's not extra, it's just when the money lands.'

If a client insists on no deposit and it is a high-risk job, consider walking away. Any client who refuses reasonable commercial terms is signalling they may also refuse to pay the final invoice. Better to lose the job now than to lose the job and the materials.

Are deposits refundable?

This is where most disputes come from, so spell it out in your quote. In most cases, the portion of the deposit spent on materials or non-recoverable labour is non-refundable. The rest, if any, can be refunded if the client cancels before work starts.

A clean cancellation clause looks like: 'Deposits are non-refundable once materials have been ordered or work has started. Prior to that, the deposit is refundable less a 10 percent administration fee.' Put this in the quote so there is no argument later.

Common mistakes to avoid

• Not charging deposits at all: you are funding your clients' projects for free
• Asking for deposits verbally and forgetting to put them in writing: you have no legal basis to retain them if the client disputes
• Charging the same deposit percentage for every job regardless of size or risk
• Not saying what the deposit is for: clients accept deposits more readily when they understand the purpose
• Refusing to provide a receipt for deposit payments: always send a formal receipt on the same day the deposit lands
• Starting work before the deposit clears: if it bounces, you are already exposed

How QuoteGenio handles it

QuoteGenio lets you add deposit terms, payment schedules, and cancellation clauses to every quote you send. Build them into one of the free quote templates once, so they appear on every job automatically. When a client accepts the quote, the deposit terms are part of the accepted agreement, legally and practically.

When the deposit is paid, you record the payment against the quote, convert the quote to an invoice, and track the remaining balance automatically. No spreadsheets, no forgotten balances, no awkward chasing. Just clean, professional cash flow management built into the tool you already use to send quotes.