No Canadian province sets a legal maximum deposit for general renovation work, so the figure is set by custom, not statute: about 10% of the contract price is the widely accepted norm, and Ontario's consumer-protection guidance treats a "larger-than-normal deposit" as a scam warning sign. The rest of the money should flow on a written progress schedule tied to work actually in place, with the statutory holdback retained on top. Get the schedule into the contract before you start. A clear deposit and draw structure is what keeps cash flowing on your side without spooking the customer.
What is a reasonable deposit
A deposit funds your early material orders and signals the customer is committed. Around 10% of the total price is the figure both contractors and consumer guidance settle on for ordinary renovation work. There is no statutory cap outside regulated new-home warranty programs, but charging well above the norm invites suspicion and, on a consumer job, can be challenged later. If a deposit is meant to cover specific materials, say so in the contract, because if those materials are never delivered the deposit may have to be returned.
Keep the deposit proportionate to genuine up-front cost. A 30% deposit on a fixed-price basement job is exactly the kind of arrangement that gets picked apart when the work goes wrong: in a documented Ontario dispute, a contractor who took a 30% deposit on a $45,000 basement and then abandoned the site faced a demand to refund it, with any retained amount limited to the fair value of work that could not be undone.
The progress-draw schedule
For anything beyond a quick job, bill in stages tied to visible milestones rather than to the calendar. A defensible residential schedule looks like:
- Deposit on signing, around 10%.
- A draw at rough-in complete (framing, then mechanical and electrical roughed in and inspected).
- A draw at drywall or finish stage.
- Final payment on completion, less the statutory holdback.
On larger commercial, institutional and industrial work under a CCDC 2 contract, the model is different: monthly progress draws based on the value of work in place, each one certified by the consultant, with the holdback retained throughout. The principle is the same on every job: you get paid for work that is genuinely done and certified, not for time passing.
The statutory holdback sits on top
Separate from your draw schedule, lien legislation forces every payer in the chain to retain a slice of each payment as a protected fund for the trades below. It is 10% in most provinces, 7.5% in Manitoba, and there is no mandated holdback at all in Quebec. The owner holds back from the contractor, the contractor holds back from you, and you hold back from anyone under you. So on a $50,000 subcontract at a 10% holdback, you should expect $45,000 as the job proceeds and the remaining $5,000 only after the lien period closes. That retained amount is your money parked, not a deduction. The mechanics, the percentages by province and the release rules are covered in The Statutory Holdback Explained; the point here is to build it into your schedule so it is no surprise.
Watch the Ontario 10% estimate cap
On a consumer renovation in Ontario, the Consumer Protection Act, 2002 stops you charging more than 10% above your estimate without the homeowner's written consent. Progress billing does not escape this: if your draws add up to more than 10% over the estimate, you need written sign-off for the overrun before you incur it. Alberta runs the same 10% rule, capped at a maximum extra of $100 without consent. The new Ontario Consumer Protection Act, 2023 (Bill 142) passed in December 2023 but is not yet in force, so the 2002 Act still governs. Quebec has no fixed percentage, but the Civil Code's good-faith and reasonable-estimate duties land in the same place.
Worked example: a $30,000 kitchen in Ontario
You quote $30,000 fixed. A reasonable structure: $3,000 deposit on signing (10%), $9,000 at rough-in, $9,000 at cabinetry and drywall, and $9,000 on completion less a 10% holdback, so the customer keeps $3,000 back until the lien window closes. Every draw is tied to a milestone the customer can see. If a change pushes the job toward $33,000 or more, that is the 10% line: get written consent before the cost lands, or you cannot enforce it.
Common mistakes
- Taking an oversized deposit. Above the roughly 10% norm reads as a red flag and can be clawed back on a consumer job if it covered materials never supplied.
- Billing by the calendar, not the work. Draws should track milestones in place, not weeks elapsed. Calendar billing is hard to defend if the job stalls.
- Forgetting the holdback in your numbers. The 10% (7.5% in Manitoba) is retained on top of your draws; plan your cash flow around getting it last.
- Blowing through the estimate without written consent. In Ontario and Alberta the 10% cap applies to the running total, not just the final invoice.
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