How much deposit can a Queensland building contractor take?

The caps and worked examples

For regulated domestic building contracts, Schedule 1B sections 6 and 7 set level 1 above the $3,300 regulated amount and below the level 2 amount. Section 45 of the current QBCC Regulation sets the level 2 amount at $20,000, so exactly $20,000 belongs in the 5% band. The examples below are our arithmetic.

This guide covers those regulated contracts. For small jobs at or below the $3,300 regulated amount, ask QBCC which rules apply to your contract.

Sources[1][2][4]

What counts towards the cap

The Act counts any payment for domestic building work demanded or received before contracted services start at the building site, including an insurance premium. For a cost plus contract, the contract price means the estimated amount. The contract price is the total payable and includes amounts you receive for payment to someone else.

Count the total of all payments demanded or received for the domestic building work before services begin at the site. Our suggested check below adds those payments together so a second invoice does not hide an excessive deposit.

Sources[1]

Off-site work and later payments

QBCC allows up to 20% in limited cases where substantial customised work or prefabrication is done away from the building site and is more than 50% of the contract price. Its examples include made-to-measure kitchen cabinetry, windows, sheds, pergolas and cladding.

After the deposit, progress claims must relate directly to progress at the site and be proportionate to the value of that work. QBCC's example is that you cannot claim more than 50% of the price, including the deposit, until at least 50% of the on-site work is done. There is no arbitrary percentage to claim.

Sources[1][2]

Pre-invoice deposit check you can copy

Run this before you send any pre-start invoice. It is our suggested check, not a statutory form.

Contract price (or estimated amount if cost plus): $[amount]
Contract level: [1 / 2 / unsure, ask QBCC]
Cap: [10% / 5% / 20% off-site exception, with reason]
Maximum pre-start total: $[price] x [cap] = $[amount]

Pre-start payments:
Deposit invoice: $[amount]
Insurance premium paid before site start: $[amount]
Other payments for the work before site start: $[amount]
Total: $[amount]

Total at or under the maximum? [yes / no]

Sources[1][2]

Common questions

What is the maximum deposit you can ask for in QLD?

For regulated domestic building contracts, the usual cap is 10% where the price is over $3,300 and under $20,000, or 5% at $20,000 or more. Up to 20% is permitted where the off-site work is more than half the contract price. Count insurance and other pre-start payments towards the cap.[1][2][4]

Can you pay more than 10% deposit on a contract?

The usual level 1 cap is 10% and level 2 cap is 5%. The specific exception permits up to 20% where off-site work is more than 50% of the contract price. Check that exception against the actual contracted work rather than agreeing a higher deposit without a basis.[1][2]