The short answer
In Victoria, a deposit for building work cannot be more than 10 per cent of the contract for jobs under $20,000, or 5 per cent for jobs of $20,000 or more. After the deposit, pay for each stage once it is finished, not in advance.
This guide covers Victoria. Other states have their own limits, so check your state regulator before you pay. Payment rules can change, so read the Consumer Affairs Victoria page linked below for the current figure.
The deposit limit
Consumer Affairs Victoria says that by law your deposit for building work cannot be more than:
- 10 per cent for contracts under $20,000
- 5 per cent for contracts of $20,000 or more
What that looks like in dollars
Example: on a $15,000 job the most a builder can ask for as a deposit is $1,500. On a $40,000 job it is $2,000.
If a quote asks for more, ask the builder to explain in writing which law allows it. A builder who is happy to show you the rule is a good sign. One who pushes back is a warning.
How progress payments work
After the deposit, you pay when each stage of the job is finished. For a contract that covers every stage, Consumer Affairs Victoria gives the usual schedule as 10 per cent at base, 15 per cent at frame, 35 per cent at lock up and 25 per cent at fixing.
Before each payment, check that the stage has passed the building surveyor's inspection, meets the contract and is complete. Consumer Affairs Victoria's advice is simple: do not pay in advance.
Insurance and bigger deposits
Consumer Affairs Victoria lists a request for a deposit over $16,000 before you receive a certificate of currency for domestic building insurance as a red flag. It also warns that home warranty insurance may not cover work you pay for before it is completed.
What about small jobs?
The limit above is for building work. For a small job like a repaint, a tap or a fence, there is often no staged schedule. Ask for a small deposit tied to a start date, put it in the quote, and pay the rest when the work is done and you are happy with it.
Common questions
Can a builder ask for more than a 10 per cent deposit?
For building contracts under $20,000 in Victoria, Consumer Affairs Victoria says the deposit by law cannot be more than 10 per cent. For $20,000 or more the limit is 5 per cent.
Should I pay a tradie the full amount up front?
No. Consumer Affairs Victoria's advice is not to pay in advance. Pay for each stage when it is finished.
Does the deposit limit apply to painters and fencers?
The limit Consumer Affairs Victoria publishes is for building work. For smaller jobs, ask for a small deposit tied to a start date and pay the balance on completion.
Sources
- Consumer Affairs Victoria: deposits and payments for building work, checked 11 November 2026
- Consumer Affairs Victoria: getting quotes, checked 11 November 2026