Taking Deposits Legally in Australia
Maximum deposit amounts are capped by law in most Australian states. The actual numbers, by state, plus how to take a deposit without getting sideways with consumer protection.
Or try it on the web →Asking for a deposit before starting a job is completely legal in Australia — but the maximum amount is capped by state-based home building laws. Get this wrong and you can be hit with fines, forced refunds, or have your contractor licence reviewed. The good news: the rules are simple once you know them.
Maximum deposits by state
For domestic building work, the typical legal maximums are: NSW (Home Building Act) — 10% for jobs over $20,000, no cap for smaller jobs but reasonableness applies; VIC (Domestic Building Contracts Act) — 10% for contracts under $20,000, 5% for contracts $20,000+; QLD (QBCC) — 10% for jobs over $3,300, 20% for off-site (prefab) components; SA (Building Work Contractors Act) — generally 10%; WA (Home Building Contracts Act) — 6.5% for contracts $7,500+; ACT — 10% for residential building work over $12,000; TAS — no statutory cap but consumer law fairness rules apply. Always check your state regulator's current rules before the contract is signed.
Deposits vs. progress payments
A deposit is the up-front payment that secures the job, locks in your schedule, and covers initial material orders. Progress payments are the staged payments you receive as the job hits milestones (e.g., demo complete, frame up, lock-up, completion). For trade work over $20,000, structuring progress payments correctly is more important than the deposit size — it's how you stay cash-flow-positive on long jobs without being out-of-pocket on materials.
How to take a deposit safely
Three rules. First, never take a deposit before the customer has accepted the quote in writing — a signed quote, an emailed acceptance, or a digital signature inside an app like QuoteMate is fine. Second, issue a deposit invoice that itemises what the deposit covers (materials, scheduling, etc.) and clearly references the parent quote. Third, pay the deposit straight into your business account, not personal. QuoteMate handles all three automatically: when a customer accepts a quote, it generates the deposit invoice and takes the payment via Square — Tap to Pay on the spot, or a hosted online link the customer pays from their phone — and logs everything against the job. If you'd rather not absorb the card fee, the optional 2.9% surcharge passthrough adds it to the customer's total.
Frequently Asked Questions
Generally no, not for domestic building work. Most Australian states cap deposits at 5%–10% of the contract value. Always check your state's current home building regulator (NSW Fair Trading, VBA in Victoria, QBCC in Queensland, etc.).
Use progress payments. For a $30,000 job, take a 5%–10% deposit on signing, then schedule progress payments at milestones (e.g., materials delivered, work commenced, halfway, completion). This keeps you cash-flow-positive without breaking deposit law.
Most state laws apply specifically to 'domestic building work' for residential customers. Commercial contracts have more flexibility but should still be governed by clear written terms.
Yes — using Tap to Pay through Square on iPhone or NFC-capable Android, you can take a deposit by card the moment the customer accepts the quote. The deposit invoice is auto-generated and the payment is logged automatically. If you'd rather not absorb the card fee, the optional 2.9% surcharge passthrough adds it to the customer's total.