Stage payments and deposits on domestic building work: a schedule that protects both sides

The builder who waits for the end of the job to invoice is financing the client's extension. The builder who asks for 50% up front frightens the client away. Between those is a payment schedule that funds the job as it progresses, keeps both sides safe and, written into the contract, stops the awkward conversation on site.

The principle

Never be more than one stage exposed. Each payment should cover the work done to date plus the materials needed for the next stage, so that if the client stopped paying tomorrow you would be out of pocket by one stage of labour and nothing more. Equally, the client should always be able to see that what they have paid for is on site.

A typical schedule for an extension

• On signing: a deposit of 10% to 15%, to secure the start date and cover design fees, building control and the first materials order
• Foundations and slab complete: 20%
• Walls to wall-plate and structural steel in: 20%
• Roof on and watertight, windows and doors fitted: 20%
• First fix complete and plastered: 15%
• Practical completion: 10% to 15%, less an agreed small retention of 2.5% for 3 months if the client asks for one

The percentages vary with the job; the shape does not. Materials-heavy stages (the glazing, the kitchen) can carry a specific payment on order, especially where the supplier wants paying on delivery.

Deposits and the law

For consumer clients the deposit should be reasonable and explained. Many trade bodies suggest no more than 25%, and lenders and warranty schemes may set their own limits. If the client pays by card, section 75 protection applies above £100, which reassures them. For larger deposits some builders offer a deposit protection scheme or insurance-backed guarantee; TrustMark registration requires it on certain schemes.

If you sign the contract at the client's home, the Consumer Contracts Regulations give the client a 14-day cancellation right. You must tell them about it in writing, and if they want you to start within those 14 days they must ask you to in writing, otherwise they can cancel and you cannot charge for the work done. A one-paragraph cancellation notice in the contract and a dated instruction to start solves it.

The Consumer Rights Act requires the work to be done with reasonable care and skill, in a reasonable time and at a reasonable price if none was agreed. Your written quote and schedule are what define "agreed".

Making the schedule stick

• Put it in the contract with the trigger for each stage described in words a client can check
• Invoice on the day the trigger is reached, with photos of the stage reached
• Give a short payment term, 7 days is normal, and say what happens if it is late: work pauses after 7 days, interest applies
• Do not start the next stage's materials order until the previous stage is paid, and say so politely
• Variations are invoiced as they are approved, not rolled into the final payment

What to do when a payment is late

Send a reminder on day one, a phone call on day three, and a written notice on day seven that work will pause. Most late payments are forgetfulness or a bank transfer limit, and a friendly system catches them. Persistent non-payment on a domestic job is a dispute, and our guide to letters before claim and small claims explains the route.

Letting the software do the chasing

EstiMate turns the quote into the contract with the payment schedule in it, signed online. Each stage becomes an invoice the client can pay by card, and overdue invoices are chased automatically with increasingly firm messages you control. Deposits can be taken online when the quote is accepted. The result is a domestic job where money arrives on schedule without you ever having to ask twice. See how invoicing and payments work.