How to Structure Deposits and Progress Payments on Residential Construction Jobs

A residential construction deposit pays for work that hasn't happened yet. A progress payment pays for work you just finished. The difference matters because deposits affect your cash flow, your material buy schedule, and how much risk you carry on every job. Most trades follow a standard draw schedule, but the percentages shift based on material costs, labor intensity, and how long the project runs. Here's what actually works in the field.

What a Contractor Deposit Actually Covers

When a customer signs your estimate and writes the first check, that money isn't profit. It's working capital. You use it to order materials, schedule subs, pull permits, and block out your crew's calendar. If the job falls through after you've spent the deposit on steel or tile, you're eating that cost.

That's why most trades ask for 25 to 50 percent up front. It's enough to cover hard costs without tying up the customer's full budget before you swing a hammer. The bigger the material package, the higher the deposit. Pool builders need more up front than a painter does because gunite, rebar, and plumbing gear all ship before the customer sees a finished product.

Florida caps contractor deposits at 10 percent of the contract price or $1,000, whichever is less, if you don't have the right license class or bonding. Once you hit your local qualifier license and post a bond, that cap disappears. Most residential work in Florida happens under a registered or certified license, so the 30 to 50 percent deposit range is legal and standard.

Draw Schedules by Trade

Every trade has a rhythm. Pool builders front-load costs because excavation, steel, and shell work all happen before the customer sees water. Kitchen remodelers spread payments across demo, rough-in, and finish because the scope changes as walls open up. Roofers collect half up front because shingles and underlayment ship before the first bundle goes on the roof.

Here's what I see in Tampa Bay and what I used when I ran pool jobs:

• <strong>Pool construction:</strong> 30 percent deposit, 40 percent at shell completion, 20 percent at tile and decking, 10 percent at final walk. That 30 percent deposit covers excavation, steel, plumbing rough-in, and the first concrete pour. The 40 percent at shell pays for gunite, back-fill, and equipment set. The last two draws cover finishes and punch list.
• <strong>Kitchen remodel:</strong> 25 percent deposit, 50 percent at rough-in and drywall, 25 percent at final completion. The deposit funds demo and material orders. The big middle payment happens when cabinets, counters, and appliances are on site and rough plumbing and electrical pass inspection. The final 25 percent releases after paint, hardware, and punch.
• <strong>Roof replacement:</strong> 50 percent deposit, 50 percent on completion. Roofing is fast. Most crews finish in one or two days. The deposit covers materials and schedules the crew. The balance clears when the site is clean and the final invoice goes out.

These aren't laws. They're norms. You can shift the percentages based on your material costs, your supplier terms, and how much float you carry. Just make sure every draw ties to a milestone the customer can see and verify.

Progress Payment Schedule vs. Construction Draw Schedule

The terms mean the same thing. A progress payment schedule lists the dollar amounts and milestones. A construction draw schedule does the same. Some GCs say draw, some say progress payment. Customers don't care as long as the payment lines up with visible work.

When I write an estimate, I break the payment schedule into phases and tie each payment to a milestone. Phase one is deposit and site prep. Phase two is structural or shell work. Phase three is finishes. Phase four is final walk and punch list. Each phase has a percentage, a dollar amount, and a description of what the customer will see before the invoice goes out.

I built a tool called Workhand that tracks job phases with milestone tracking and shows the contract value on the job header. When you hit a phase, the app calculates estimated profit as contract value minus spent. It's clean for the PM and clear for the customer. You can track profit per job and see margin in real time as costs roll in.

How to Collect Progress Payments Without Chasing

Set the payment schedule in the estimate before the contract is signed. Make it part of the scope discussion. When the customer knows they'll pay 30 percent at excavation and 40 percent at shell, there's no surprise when the invoice hits their inbox.

Send the invoice the day you hit the milestone. Don't wait a week. If you finished tile on Tuesday, the invoice goes out Tuesday afternoon with photos of the completed work. Attach a couple of shots from the job site so the customer sees exactly what they're paying for.

We built Workhand invoices with email delivery and read receipts. You know when the customer opened the email. If three days pass and no response, you follow up with context instead of guessing. Stripe Connect is built in, so the customer can pay by card at 2.9 percent plus 30 cents. Workhand adds zero on top. The payment hits your account in two days and the invoice auto-marks as paid.

If you're working with a GC or a builder who manages the budget, ask for a draw request form and a sign-off process in the contract. Some GCs release progress payments on a monthly schedule regardless of milestones. Lock that in writing so you're not floating costs for 45 days.

Mistakes That Kill Your Cash Flow

The biggest mistake is taking too small a deposit. If you ask for 10 percent and the material package is 40 percent of the contract, you're fronting 30 percent out of your own cash. That works if you're running five jobs at once and the cash flow overlaps. It doesn't work if you're a two-person crew running one job at a time.

Second mistake is not tying payments to milestones. If your payment schedule says "Invoice two: $15,000 due on April 10," and April 10 lands in the middle of a phase, the customer will ask why they're paying before the work is done. Tie every payment to a visible deliverable. Shell complete. Drywall and paint done. Final walk and punch cleared.

Third mistake is letting invoices slide. If you finish a milestone on the 15th and send the invoice on the 28th, the customer assumes the work isn't urgent and the payment can wait. Send it same day. Follow up at three days if it's not paid. Most customers pay on time if you make it easy and you don't let the process drift.

Florida Deposit Rules and What Actually Applies

Florida Statute 713.20 limits contractor deposits to 10 percent or $1,000 if you're working under an unregistered or unlicensed structure. Once you hold a registered or certified contractor license and post the required bond, that cap goes away. Most residential contractors in Florida operate under a certified general, certified building, or registered specialty license, so the 10 percent rule doesn't apply.

If you're a small crew without the license or bond, keep deposits at $1,000 or below and plan your cash flow around progress payments instead. You'll send more invoices, but you stay legal and you don't risk a complaint to the state board.

When in doubt, check with your attorney or your license qualifier. The statute is clear, but enforcement and interpretation shift by county. Hillsborough and Pinellas have active building departments that will flag deposit violations if a homeowner files a complaint.

Frequently asked questions

How much should I ask for as a deposit on a residential construction job?

Most trades ask for 25 to 50 percent up front, depending on material costs and project length. Pool builders typically take 30 percent, kitchen remodelers take 25 percent, and roofers often ask for 50 percent because materials ship before the work starts.

What's the difference between a deposit and a progress payment?

A deposit pays for work that hasn't happened yet. It covers materials, permits, and scheduling. A progress payment pays for work you just completed and ties to a milestone the customer can see and verify.

Can I legally ask for more than 10 percent down in Florida?

Yes, if you hold a registered or certified contractor license and post the required bond. The 10 percent cap in Florida Statute 713.20 only applies to unlicensed or unregistered contractors.

How do I write a progress payment schedule into my estimate?

Break the job into phases and tie each payment to a milestone. List the percentage, the dollar amount, and a description of what the customer will see before the invoice goes out. Make it part of the contract before you start work.

What do I do if a customer won't pay a progress payment on time?

Stop work and send a follow-up email with the original invoice and photos of the completed milestone. If they still don't pay, review your lien rights under Florida Statute 713 and send a Notice to Owner if required.

Should I use the same draw schedule for every job?

No. Adjust the percentages based on material costs, labor intensity, and project length. A fast roof replacement uses a different schedule than a six-month pool build.

How do I track which phase a job is in and when to send the next invoice?

Use job phases with milestone tracking so your PM knows when a phase is complete and the next payment is due. Workhand shows contract value, spent costs, and estimated profit on every job header so you see exactly where you stand.

Can I accept credit card payments for progress payments?

Yes. Most payment processors charge 2.9 percent plus 30 cents per transaction. Workhand integrates Stripe Connect so customers can pay invoices by card, and the payment hits your account in two days with no extra markup from us.