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Contractor Deposit Rules: How Much Is Legal in Your State?

Apr 18, 2026·6 min read

Several states cap how much a contractor can collect upfront on a residential project. California is the strictest: 10% of the contract or $1,000, whichever is less. New York caps deposits at 33% on home improvement work.

Texas, Alabama, Mississippi, and Florida have no statutory deposit cap — but industry standard for handyman work is no more than 10–25% upfront, with progress payments tied to defined milestones.

On HandyMandyMan, no money moves into escrow until you confirm a quote, and no money releases to the pro until you confirm the work is complete (or a 48-hour auto-release period passes).

If a contractor outside our platform demands 50%+ upfront, treat it as a red flag regardless of what your state law allows.

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