Deposits and Retainers: How to Get Paid Before You Start
The best time to get paid is before you start. A deposit invoice puts part of the money in your account while the job is still on paper, which means you are not carrying all the risk alone. Most clients expect it. The ones who push back hardest are usually the ones you most need to protect yourself from.
This guide covers the three ways to ask for money up front, how much to request, and how to word it so it reads as normal business. Then it walks through a full example: a deposit invoiced, paid, and credited against the final bill.
Money up front lowers your risk on every job
Every job you start without a payment is a loan you are making to the client. You buy the materials. You book the days. You turn down other work to fit them in. If the client disappears or stalls, you eat all of it.
A deposit changes the math. The client puts something on the line before you lift a tool. If they cancel, the deposit covers the time you already spent and the work you turned away. A client who has paid something is also far more likely to pay the rest. They have already decided you are worth it.
Deposit, retainer, and progress billing are not the same thing
People mix these three up all the time. They describe different situations, and using the right one keeps you and your client clear on what the money is for.
Deposit or down payment
A deposit is a percentage of one specific job, paid before the work starts and applied to the final bill. Quote a $6,000 deck and ask for 40 percent, and the client sends $2,400 now. That $2,400 is not extra. It comes off the total at the end, so the client only owes the remaining balance once the job is done.
Retainer
A retainer is money paid to reserve your availability, not to cover one job. A client who wants you on call for ongoing work pays a set amount each month, and you hold time open for them. Some retainers buy a block of hours, say 10 hours a month. Others simply keep you available. A retainer suits ongoing relationships: a design client with a steady stream of small tasks, or a property manager who calls you for repairs.
Progress billing
Progress billing splits a large job into stages and invoices each stage as you finish it. Instead of one deposit and one final bill, you invoice at milestones: a payment to start, a payment when the framing is up, a payment at completion. This keeps cash coming in on long jobs and limits how far ahead of payment you ever get. It is common on builds and renovations that run for weeks.
How much to ask for
There is no legal rule, but there are norms. On small jobs, some tradespeople skip the deposit and bill on completion. On larger jobs, a deposit of 30 to 50 percent is standard and nobody blinks at it.
Use the deposit to cover your hard costs. If a job needs $1,800 in materials, your deposit should at least cover that, so you are never buying supplies out of your own pocket for someone else's project. Match the amount to your exposure:
- Low material cost, short job: 25 to 30 percent, or bill on completion for small work.
- Larger job or custom materials: 40 to 50 percent up front to cover what you order.
- Long multi-week job: use progress billing instead, with a smaller start payment and staged invoices.
Contractors and trades workers who order materials should lean toward the higher end. A freelancer whose main cost is their own time can often ask for less. There is more on structuring this on the contractor invoicing page.
How to ask so it sounds standard, not pushy
The wording matters. Ask like it is a favor and the client hears doubt. State it as your normal process and the client treats it as normal. Put the deposit in your estimate from the start, so it is agreed before any invoice goes out.
Plain lines that work:
- On the estimate: "A 40% deposit is due to book the work. The balance is due on completion."
- In an email: "To get you on the schedule, I'll send a deposit invoice for 40%. Once that is paid, I'll order materials and confirm your dates."
- If asked why: "The deposit covers materials and holds your spot. It comes straight off your final bill."
Tie the deposit to something the client wants: a spot on your calendar, the materials order, the start date. You are not asking for money for nothing. You are asking for the payment that lets the work begin. Spell out the rest of the schedule too, so the due date on the balance is clear. If you are not sure how to write those due dates, see invoice payment terms explained.
How to invoice a deposit and apply it to the final bill
This is where people get tangled. The deposit is not a separate sale. It is an advance on the total, and your paperwork has to show that clearly so the client is never charged twice.
Here is the full sequence on a $6,000 deck build with a 40 percent deposit.
1. Send the deposit invoice. Create an invoice for $2,400 with a line that reads "40% deposit - deck build, applied to final invoice." The client can see this is not the whole job. Send it as a PDF and wait for payment before you order lumber.
2. Record the payment. When the $2,400 lands, record it against that invoice so it shows paid. Now you have the deposit in hand and a record of it.
3. Do the work. Build the deck. Track any hours or extra materials as you go so the final numbers are accurate.
4. Send the final invoice with the deposit credited. The final invoice shows the whole job, then subtracts what the client already paid:
- Deck build, labor and materials: $6,000
- Less deposit paid on April 2: -$2,400
- Balance due: $3,600
The client sees the full $6,000 they agreed to, sees their $2,400 credited, and owes the $3,600 balance. No confusion, no argument about what was already paid. In SettleDue you can run it either way. Send the deposit invoice and then a final invoice with the deposit as a credit line, or invoice the full $6,000 and record the $2,400 as a partial payment so the invoice shows a $3,600 balance. Both leave a clean record of what was paid and what is still owed.
What a deposit tells you about a client
The deposit is a test, and it is free to run. A client who pays it without fuss has money set aside and treats your work as real. That is the client you want.
A client who refuses to pay anything up front is showing you something. Maybe they do not have the cash. Maybe they plan to hold payment back to keep the upper hand. Maybe they argue every invoice on principle. Whatever the reason, a person who will not risk a deposit is a person who might never pay the balance, and by then you have done all the work. Established clients expect deposits and pay them. Treat a hard refusal as a warning, not a negotiation.
You can hold firm without being rude. "I understand, but the deposit is how I book every job" is a complete answer. If they still say no, you have learned what the full job would have been like, and you learned it before you were owed thousands of dollars.
Get the first payment in
Asking for money up front is not aggressive. It is how every serious trade and freelance business runs. Set your deposit percentage, put it in your estimate, and send a clean deposit invoice before you start. Then credit it on the final bill so the balance is never in doubt.
SettleDue has handled deposits, partial payments, and final invoices for freelancers and contractors since 2011. You create the invoice, record the deposit, and the balance tracks itself.
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