Plain-English guide
How much to pay a tradie — deposits, progress payments and protecting yourself
The way you pay is one of your best protections against a job going bad. Here's what a reasonable deposit looks like, what the law says about how much a builder can ask for up front, and how to structure payments so you keep the leverage until the work is done right.
What's a reasonable deposit?
For a small job — a leaking tap, a powerpoint, a day's painting — you often shouldn't be paying a deposit at all; you settle when it's done. For bigger jobs where the tradie has to buy materials up front, a modest deposit to cover those materials is fair and normal.
The warning sign is a demand for a large deposit — half the job, or more — in cash, before any work has started. That's the single most common way people lose money to a dodgy operator: they take the deposit and disappear, or they do a token amount and keep asking for more. A genuine, established tradie has cash flow and doesn't need you to fund the whole job up front.
What the law says (builder deposit caps)
For domestic building work, several states legally cap how much deposit a builder can take. The caps vary by state and by the size of the contract, but they're generally in the range of 10% of the contract price (sometimes higher for smaller jobs). The point is the same everywhere: you should never be handing over a big chunk of the total before work begins.
Larger building jobs are also usually done on a written contract with progress payments — you pay in stages as defined milestones are completed (slab down, frame up, lock-up, and so on), not in one lump. That structure protects both sides, and above a set contract value it's often legally required, along with home building/warranty insurance. Check your state's fair trading or building authority for the current figures before you sign.
How to structure payments on a bigger job
- Get it in writing
A written quote or contract stating the total, the payment stages, and what each stage covers. No paper trail is a red flag.
- Pay by stages tied to progress
Each payment released only when that stage is genuinely complete — not 'nearly done'. This keeps the work moving and your leverage intact.
- Always hold a final payment
Keep a meaningful amount back until the whole job is finished and you've inspected it. That last payment is what gets defects fixed.
- Use a traceable method
Bank transfer or card, not cash. A record protects you if there's a dispute — and cash-only is a classic cash-in-hand, no-recourse setup.
Before you pay the final invoice
Walk the job before you release the last payment. Check the work against what was quoted, test anything that should work (taps, switches, doors), and make sure the site's been cleaned up and any rubbish removed. If something's not right, this is your moment — it's far easier to get a tradie back while you're still holding their final payment than after.
Keep every invoice and receipt. For an investment property the cost may be tax-relevant, and for any job the paperwork (with the tradie's ABN and licence) is your evidence if you ever need to make a warranty claim or escalate a dispute to fair trading.
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Post your job — freeCommon questions
How much deposit should I pay a tradie?
For small jobs, often none — you pay on completion. For bigger jobs where materials are bought up front, a modest deposit is fair. Be very wary of any demand for a large deposit (say, half or more) in cash before work begins — that's the most common way people get burned.
Is there a legal limit on builder deposits in Australia?
Yes, for domestic building work several states cap the deposit a builder can take, generally around 10% of the contract price (it varies by state and job size). Larger jobs also typically use staged progress payments and require home warranty insurance above a set value. Check your state's building authority for current figures.
Should I pay a tradie in cash?
Pay by a traceable method like bank transfer or card. A record protects you in a dispute and gives you paperwork for warranty or tax purposes. Cash-only, no-invoice arrangements leave you with little recourse if something goes wrong.
When should I make the final payment?
Only after the whole job is finished and you've inspected it against the quote. Holding back a meaningful final payment until you're satisfied is your best leverage for getting any defects fixed — it's much harder once they've been paid in full.
General information only, not legal advice. Licensing and insurance requirements vary by state and territory and change over time — always confirm current requirements with your state regulator and get professional advice before acting.