You have quoted the job, the client is keen, and you need cash upfront to order materials and lock in your tradies. So you ask for 30% to get started. It feels reasonable. It is also the kind of request that can put you offside with the QBCC maximum deposit rules before you have lifted a tool.
We hear this from contractors all the time: cash flow is tight, suppliers want payment up front, and nobody told you there was a hard cap. That frustration is fair. But the rules exist, they are specific, and getting them wrong can hurt your reputation, your client relationship and your licence. Here is what the limits are and how to work within them without starving your business of cash.
What the QBCC maximum deposit limits actually are
For domestic building work in Queensland, the deposit you can ask for before starting depends on the value of the contract. According to the QBCC, the caps are:
- $3,300 or less: up to 20% of the price.
- $3,301 to $19,999: up to 10% of the contract price.
- $20,000 and above: up to 5% of the contract price.
Read that last line again. On a $100,000 renovation, your maximum deposit is $5,000. Not $20,000, and not the 30% some clients assume is normal. These limits sit in Schedule 1B of the QBCC Act, and Master Builders Queensland notes they “must not be exceeded”.
Anything over $3,300 also needs a written contract, and the client gets a five business day cooling-off period. So the deposit clause is not a handshake item. It needs to be in writing, and it needs to be right.
The off-site work exception that catches people out
There is one genuine carve-out, and it is where many contractors either miss out or overreach. The deposit can rise to 20% when substantial customised or prefabricated work is done off-site and that work makes up more than 50% of the total contract price, including labour, materials and GST.
The QBCC gives examples such as made-to-measure kitchen cabinetry, windows, sheds, pergolas and cladding. The test is the 50% threshold, not whether some of your materials are ordered in. A job that is mostly on-site labour with a few ordered fittings will not qualify, and claiming the exception without being able to show the numbers is a risk you do not want to carry.
“If you cannot show on paper that more than half the contract price is off-site customised work, assume the 5% or 10% cap applies.”
Karen Zhang, QBCC Express Founder
Why the deposit is only half the problem: progress payments
Many contractors fix the deposit and then trip on the next step. On contracts over $3,300, progress payments must match the work actually completed. The QBCC gives a clear example: a contractor cannot claim more than 50% of the contract price, deposit included, until at least 50% of the on-site work is done.
Front-loading your payment schedule to protect cash flow looks smart until a client complains. The QBCC also warns homeowners that paying above the maximum deposit, or paying ahead of schedule, reduces their protection under the Queensland Home Warranty Scheme. A client who feels burnt by an inflated schedule has every reason to lodge a complaint, and a complaint is how a cash flow shortcut becomes a compliance problem.
If you are staring at a contract template you have used for years and suddenly doubt it, that worry is justified and fixable. A short review now is far cheaper than defending a complaint later. If you want a second set of eyes on your contract and payment terms, book a Strategy Session with QBCC Express and we will work through them with you.
How to set up your contract so you stay protected
You can still manage cash flow inside the rules. Work through these steps on your next job:
- Check the contract value first. Work out which band you are in ($3,300 or less, up to $19,999, or $20,000 and above) before you write the deposit clause.
- Calculate the dollar figure. Write the actual maximum amount into the contract, not just a percentage, so there is no argument later.
- Tie progress payments to stages. The QBCC recommends clearly defined construction stages so the client can verify completion against the contract.
- Document any off-site exception. Keep supplier quotes and a cost breakdown showing off-site work is more than 50% of the price.
- Use a fixed-price contract where you can. It is the structure the QBCC points homeowners towards, so it keeps both sides inside the protections.
- Build in the warranty insurance step. Residential work over $3,300 generally needs the QBCC insurance premium paid before work starts, and it should be factored into your timeline.
Notice that none of this stops you getting paid. It simply makes sure you are paid in a way that protects you and the client, so a payment dispute does not become a licence problem.
Do not wait for the complaint to find your contract
The QBCC treats a contractor insisting on a deposit above the maximum as a possible red flag, and homeowners are told they are not obliged to pay it. That means the first sign of trouble is often a client who quietly refuses, then rings the regulator. By then your contract is already under the microscope.
Getting your deposit and payment terms right takes an hour, not a month. If you are unsure whether your current terms stack up, book a Strategy Session with QBCC Express before your next contract goes out the door.
Frequently Asked Questions
What is the maximum deposit a builder can ask for in Queensland?
It depends on the contract value. The QBCC sets 20% for work of $3,300 or less, 10% for $3,301 to $19,999 and 5% for $20,000 and above. A 20% cap can also apply where off-site customised work exceeds 50% of the price.
Does the deposit include GST?
The percentage is applied to the contract price, and for the off-site exception the QBCC counts labour, materials and GST in the total price. Work out the cap from the full GST-inclusive contract price and write the dollar amount into the contract.
Do I need a written contract for a small job?
Domestic building work valued over $3,300 requires a written contract. A written quote with a fixed price and a clear description of the work can form the basis of a contract if no other contract was signed.
Can a client cancel after signing?
For work over $3,300, clients get a five business day cooling-off period, which does not apply if they received legal advice before signing. They must withdraw in writing, so build this window into your start date and material orders.
Can I claim progress payments early to cover my costs?
No. Progress payments on contracts over $3,300 must reflect the work completed. The QBCC example is that you cannot claim more than 50% of the price, deposit included, until at least 50% of the on-site work is done.
