How to ask for a deposit before you start work

Ask for the deposit when you quote, as the first part of the total fee: an amount, a due date, and a start date that depends on its arrival. Size it to cover what you'll spend and the work you'll do before the next payment arrives. If the client says no, trade it for milestone billing or shorter payment terms.

What does a deposit protect you from?

Money up front protects you from three costs that land before your first invoice is paid. A deposit covers the first two; the third needs its own fee.

• Money you spend for the client. Licenses, materials, travel or a subcontractor, paid before they've paid you.
• Work you do before the first payment. On a fixed fee billed at delivery, all of it is unpaid until the end, and Net-60 terms can add up to 60 days from the date the contract counts from, usually the invoice date.
• Time you hold for them. Turn down other work for their dates, and a late cancellation leaves a gap.

For other clauses that cost a smaller supplier money, see negotiating as the smaller party.

What do standard contracts say about money up front?

The standard terms of two published, neutral contracts have no deposit clause: the Professional Services Agreements from Bonterms (version 1.2) and Common Paper (Standard Terms version 1.1). Both put fees and payment details in each statement of work (SOW), so that's where a deposit goes.

• Invoicing may wait for acceptance. In Bonterms, no invoice is issued for a deliverable the SOW makes subject to acceptance until it's accepted (§3.4(f)). An SOW that asks for a deposit should name that section as one it changes (§17.5). Our statement of work guide shows where.
• "Non-refundable" comes with exceptions. Both forms call fees non-refundable, except in cases the agreement sets out (Bonterms §10.1, Common Paper §4.1). Common Paper's provider refunds "any unearned, prepaid Fees" when the contract ends, except where the provider terminates under §5.2(a) (§5.3(e)): for a material breach not cured within 30 days of notice or one that can't be cured, the client ceasing business, or listed insolvency events.
• Write the dates, and say what a payment buys. New York City's consumer and worker protection agency publishes a model freelance contract. Its note on installments says the amounts and due dates "must be detailed in the contract." Its optional retainer is an up-front payment for anticipated work that "can be drawn upon." It also pays the freelancer for "foregoing other work opportunities," and the client "understands that this payment is nonrefundable."

Some trades have their own limits. California's contractor licensing board says the down payment on a home improvement job or swimming pool can't be more than $1,000 or 10% of the contract price, whichever is less, excluding finance charges. There's no exception for special-order materials. If you do similar work for homeowners, check your trade's rules first.

How much should you ask for?

Add what you'll pay out for the client to the work you'll do before the next payment arrives, counting review time and payment terms. The figures below are made up.

• Tamsquill Studio quotes Brackenhowe Cider a fixed $9,000 for six weeks of packaging work.
• It buys $600 of font and image licenses, then spends two weeks, about $3,000 of work, on concept designs.
• Deposit: $600 plus $3,000, so $3,600, or 40% of the fee. It counts toward the $9,000.
• Next, $2,700 is invoiced when the concepts are approved. It pays for design development, which starts once that payment arrives.
• The last $2,700 is invoiced on delivery of the final files.

If you'd keep working while the client reviews and pays, count that work too. On a job of a week or two, the same sum can come close to the whole fee, so asking for most or all of it up front is a reasonable request.

What should you ask for in your situation?

Choose deposit terms for your situation from the table below. Percentages and days are our suggestions, not market rates.

What do you send, and what goes in the contract?

Use the same words in your email and your contract. Brackets are placeholders.

If they won't pay a deposit, shrink what's at risk, with a right to pause when an invoice is overdue (see our Net-60 guide):

Put this clause in the payment section of your freelance service agreement or SOW. On a client's template, its override sentence replaces any conflicting invoice deadline.

Any unused deposit is refunded when work stops early, so it doesn't pay for held dates. A separate booking fee does. It raises the total price; keeping it outside the project fee is our suggestion. You can describe what it buys the way New York City's model retainer does:

Before you count on keeping any non-refundable fee after a cancellation, ask a lawyer how your state treats it.

When can you start without a deposit?

Skipping the deposit is reasonable when little is at risk, or the client has shown it pays.

• A repeat client with a clean payment record. Keep milestones or invoices every two weeks.
• Short invoicing cycles, and nothing to buy for them. Invoicing every week or two on short terms reduces the amount outstanding.
• A large company that won't pay before work starts. Start only under a signed SOW with payment terms, plus their purchase order if they use one, if you can carry the cost to the first payment. Under Bonterms, terms in a purchase order don't change the agreement; they're "for administrative purposes only" (§17.4). Put the payment terms in the signed SOW, not in their purchase order.

What should you check before you send it?

1. The amount is a dollar figure, or a percentage of a stated total fee.
2. The deposit is invoiced on signing and due within a set number of days. Work starts on the agreed date once it has arrived, and dates move if it's late.
3. The deposit counts toward the total fee, and later invoices bill only the balance.
4. If the work ends early, the contract values work done, subtracts every payment received, and refunds or invoices the difference. Any booking fee is separate and says what it buys.
5. The email, the deposit invoice and the contract match. If you use Bonterms terms with acceptance, the SOW names §3.4(f) as changed.

When should you get a lawyer?

Get a lawyer's view when the money up front is large or your trade's rules are unclear.

• You plan to keep money up front after a cancellation, well above your real costs.
• You do home improvement or similar work for homeowners, where limits like California's may apply.
• The client is in another country, or the contract uses a law you don't know.
• The client cancels, and you disagree on what the work done was worth.

When does handling deposits by hand stop working?

A deposit line in your quote and a clause in your template work for a few projects at once. They slip when each client gets a different amount and schedule, spread across an MSA, an SOW and emails. They also slip when a client's own template drops "work starts once the deposit arrives" or changes how the deposit counts toward the fee. That's when it's worth having a tool draft the payment terms from your own clauses and show every change to them in the client's reply.

DealMate is an AI contract assistant that takes a deal from first draft to final: describe the deal in a sentence and get a draft built from your templates and clauses; when they send their template, review it from your side and see what's risky; when their redlines come back, compare the versions and see every change and the risk it carries.