INSIGHT · CONTRACTS & PAYMENTS

The deposit cap is the small number.
The progress payment rule shapes the cash flow.

9 October 2026

State law caps the deposit on a residential building contract: 10% of the contract price in NSW; in Victoria 5% where the contract price is $20,000 or more and 10% below; in Queensland 5% for contracts of $20,000 or more, 10% below, and 20% where off-site work exceeds half the price; in South Australia 5% from $20,000 and $1,000 below; in WA 6.5%. After that, payments are tied to stages or to work already done, and Victoria's Act alone of the five sets stage percentages.

A worker walking across a finished concrete slab on a building site

Analysed 9 October 2026 · Home Building Act 1989 (NSW), current version from 10 June 2026 · Domestic Building Contracts Act 1995 (Vic), Authorised Version 094 as at 1 July 2026 · QBCC Act 1991 (Qld), current version from 1 February 2026 · Building Work Contractors Act 1995 (SA), current version, and Regulations 2026 · Home Building Contracts Act 1991 (WA), as at 5 April 2023 · all read 9 October 2026, the NSW and SA registers through a rendering proxy because the sites block automated access.

Key takeaways

Five deposit caps, three of them banded at $20,000: Victoria, Queensland and South Australia step the cap down at a contract price of $20,000. NSW sets 10% of the contract price and WA 6.5% of the total amount payable, without a price band.
Off-site work changes the cap in two states: Queensland allows 20% where the value of off-site work is more than 50% of the contract price (Schedule 1B, s 33). WA's Regulations allow 20% for cabinetry work where off-site work is more than 50% of the total amount payable (reg 3A).
Victoria publishes stage percentages; the others set a test: Victoria's s 40 table caps payments at each of base, frame, lock-up and fixing stage. NSW authorises stage-based or cost-incurred progress payments; Queensland requires a claim to be directly related to progress and proportionate to the work; South Australia and WA require a genuine progress payment.
The deposit can depend on the insurance certificate: In NSW, for contracts over $20,000 inclusive of GST, no payment, including a deposit, may be demanded or received until a home warranty insurance certificate has been provided (s 92(2)). In WA, for work over $20,000 needing a building permit, the owner must have the certificate before a demand for any payment, including any deposit (s 25C(2)).
We would model receipts from the statute, not the contract template: A system-design recommendation: each contract's cash flow forecast carries its state's deposit cap, its payment basis and the stage or evidence each claim depends on, so a forecast cannot schedule a receipt the Act does not allow.

The deposit cap, state by state

Each Act measures the deposit against a slightly different base and draws the line at a slightly different moment.

Queensland's level 2 amount of $20,000 is set by the QBCC Regulation 2018, s 45, in the version current from 1 September 2026. Queensland's definition of deposit covers any payment for domestic building work received before the contracted services start at the building site, and names any insurance premium paid under Part 5 as an example.

State and provision	Maximum deposit as published	Base and moment	Contracts covered
NSW: Home Building Act 1989, s 8	10% of the contract price	A payment on account before work is commenced under the contract	Residential building work contracts, other than between licensees or for specialist work only
Vic: Domestic Building Contracts Act 1995, s 11	5% of a contract price of $20,000 or more; 10% of a contract price less than $20,000	Demanded or received before starting any work under the contract	Domestic building contracts
Qld: QBCC Act 1991, Sch 1B s 33	10% for a level 1 regulated contract (below $20,000); 5% for level 2 ($20,000 or more); 20% where off-site work is more than 50% of the contract price	Before starting to provide the contracted services at the building site; the definition names an insurance premium paid under Part 5 as an example	Regulated contracts, over $3,300
SA: Building Work Contractors Act 1995, s 30(4)	Price less than $20,000: not more than $1,000; price $20,000 or more: not more than 5% of the price (contracts from 1 September 2011)	A deposit listed as a prescribed payment	Domestic building work contracts other than minor domestic building work
WA: Home Building Contracts Act 1991, s 10(1)(a)	Not more than 6.5% of the total amount payable; 20% for cabinetry work with more than 50% off-site work (reg 3A)	Before the commencement of the home building work	Contracts above $7,500 and below $500,000, other than cost plus

Progress payments: a table in one state,
a test in the others.

After the deposit, the Acts take two approaches. Victoria lists stages and percentages. The other four set a test that each claim has to meet.

Security of payment legislation is a separate regime and is not covered here; NSW s 8A(5) and SA s 30(1)(ab) each refer to it in their own words.

State	Rule for progress payments, as the Act states it	Provision
NSW	For contracts over $20,000 (inclusive of GST), a progress payment is authorised only if it is a specified amount or percentage payable after completion of a specified stage described in clear and plain language, or for labour and materials for work already performed or costs already incurred (a margin may be included), supported by documents and at fixed or as-invoiced intervals, or authorised by regulation	s 8A; Home Building Regulation 2014 cl 11
Victoria	For listed contract types, no more than the table percentage of the contract price at the completion of each stage; for other major domestic building contracts, no amount not directly related to the progress of the work	s 40(2), (3)
Queensland	No claim other than the deposit unless the amount is directly related to the progress of the work at the building site and proportionate to the value of the work it relates to, or less	Sch 1B s 34
South Australia	s 30(1): no payment demanded unless it is a genuine progress payment for work already performed or a security of payment entitlement; s 30(2a): no payment demanded unless it is a prescribed payment; the owner is not obliged to pay a progress payment unless asked by written notice	s 30(1), (2a), (3)
WA	After commencement, only a genuine progress payment for work already performed or materials or services already supplied, or a prescribed payment; a schedule of payments at specified stages is taken to be genuine until the contrary is shown	s 10(1)(b), (3), (5)

Victoria's stage table

Section 40(2) states a builder must not demand or recover or retain under a major domestic building contract of a listed type more than the listed percentage of the contract price at the completion of a stage. The Act defines each stage: base (for example, footings poured or the floor completed, depending on construction type), frame (completed and approved by a building surveyor), lock-up (external cladding, roof covering, flooring, external doors and windows fixed) and fixing (internal cladding, architraves, skirting, doors, built-ins and fittings fixed).

The s 40 table below lists no completion stage. Parties can agree that s 40(2) and (3) do not apply only in the manner the Regulations set: a warning in Form 1 signed by the owner before signing the contract, and a clause in Form 2 signed by both before they sign (Domestic Building Contracts Regulations 2017, reg 13).

Type of contract	Stage	Percentage of contract price
Contract to build to lock-up stage	Base stage	20%
Contract to build to lock-up stage	Frame stage	25%
Contract to build to fixing stage	Base stage	12%
Contract to build to fixing stage	Frame stage	18%
Contract to build to fixing stage	Lock-up stage	40%
Contract to build all stages	Base stage	10%
Contract to build all stages	Frame stage	15%
Contract to build all stages	Lock-up stage	35%
Contract to build all stages	Fixing stage	25%

Where the deposit line falls,
and what counts towards it.

A deposit cap is only as useful as the definition of the moment it ends and of what is inside it. The Acts draw both differently.

NSW: commencement cannot be deemed early: Section 8 defines a deposit as a payment on account before work is commenced. For contracts over $20,000 entered into from 1 March 2015, clause 10 of the Home Building Regulation 2014 bars a term that treats residential building work as commenced before it is performed on the land.
Queensland: the site is the line, and the premium is inside: The cap applies before the contracted services start at the building site, and the definition of deposit names any insurance premium paid under Part 5 as an example of a payment it includes. Work done somewhere else and installed later is the off-site work that can lift the cap to 20%.
South Australia: third-party money is separate: The prescribed payments in s 30(4) list, beside the deposit, payments to a third party for engineering, drawing, surveying or other professional services, and reimbursement of building indemnity insurance or of a fee required under an Act.
South Australia: two $20,000 lines with different measures: Division 1 does not apply to minor domestic building work (s 27(2)); for contracts made on or after 10 November 2025 that is a cost to the owner below $20,000 (reg 4(4)(c)). The $1,000 deposit band in s 30(4) applies to a contract price below $20,000. We report both as written and do not state how they interact.

What the caps do
to a cash flow forecast.

A residential builder's cash flow forecast starts with one statutory fact: before work begins, the business may hold at most a small share of the contract price. On an illustrative contract price of $450,000, the cap works out at $45,000 in NSW (10%), $22,500 in Victoria, Queensland and South Australia (5%), and $29,250 in WA (6.5%), our calculation, ignoring GST and any off-site or cabinetry exception.

Everything after that is earned against an event. In Victoria the event is a defined stage and the percentage is fixed by the Act. In NSW it is a stage the contract itself describes, or cost already incurred with supporting documents. In Queensland, South Australia and WA it is work already done, judged by whether the claim is proportionate or genuine.

The operational consequence is that a forecast built from a contract template's payment schedule can be wrong in a way the template never shows. A receipt dated before the stage is complete, a deposit invoice raised before the insurance certificate in NSW or WA, or a claim larger than the work it relates to in Queensland, is the kind of receipt these provisions address.

What we would put in a system

For each residential contract's cash flow forecast, we would test for five fields.

Where agents help here is narrow. A finance and cash flow agent can read a contract's payment schedule, map each claim to its state's rule, draft the forecast, and flag a receipt scheduled before its stage, its evidence or the insurance certificate, and a person confirms it. No agent decides whether a payment is authorised, whether a claim is proportionate or genuine, or whether a stage is complete. Those are questions for the parties, the regulator and your advisers.

Field	Why it is load-bearing
State, contract price and the deposit cap that applies	The cap is a percentage of different bases and steps at $20,000 in three states.
Off-site share of the contract	In Queensland and for WA cabinetry work, an off-site share above 50% changes the cap to 20%.
Payment basis for each claim: stage, cost incurred or work done	Victoria's stages are fixed by the Act; NSW requires the stage or the cost evidence to be stated; the others test each claim against work done.
Evidence date for each claim	Stage completion, building surveyor approval of frame in Victoria, or invoices for cost incurred in NSW, dated before the receipt.
Insurance certificate date	Above the insurance thresholds (NSW over $20,000 inclusive of GST; WA over $20,000), ss 92(2) and 25C(2) name the deposit.

Questions worth asking
of your own payment schedules

For a Victorian builder: does your contract template's schedule match the s 40 table for the contract type you are using?

The table caps lock-up, fixing and all-stages contracts differently. Section 40(4) states s 40(2) and (3) do not apply if the parties agree in the manner the regulations set; reg 13 sets a signed Form 1 warning and Form 2 clause.

For a NSW builder: is each progress claim either a stage the contract describes in plain language, or a cost already incurred with documents?

Section 8A authorises those kinds, or a kind the regulations authorise. A claim that is neither is the case the section addresses.

For a Queensland or WA builder with prefabricated or cabinetry work: is the off-site share recorded?

Above 50% the deposit cap changes to 20%, so the share is a contract field, not a production detail.

For finance: does the forecast date any deposit before the insurance certificate in NSW or WA?

Above each Act's insurance threshold (NSW over $20,000 inclusive of GST, WA over $20,000), both Acts name the deposit. A forecast that does not hold the certificate date cannot show it.

Questions people ask
about deposits and progress payments

What is the maximum deposit for a home building contract in NSW?

Section 8 of the Home Building Act 1989 states the maximum deposit for residential building work is 10% of the contract price, a deposit being a payment on account before work is commenced. It does not apply to contracts between licensees for licensed work. Current version from 10 June 2026, as read on 9 October 2026.

What are the progress payment stages in Victoria?

For a contract to build all stages, s 40 of the Domestic Building Contracts Act 1995 caps payments at 10% of the contract price at base stage, 15% at frame, 35% at lock-up and 25% at fixing. Lock-up and fixing contracts have their own percentages. Authorised Version 094, as at 1 July 2026.

How much deposit can a builder take in Queensland?

Schedule 1B, s 33 of the QBCC Act 1991 caps the deposit at 10% for regulated contracts over $3,300 and below $20,000, 5% for contracts of $20,000 or more, and 20% where off-site work is more than 50% of the contract price. The Act's definition of deposit names any insurance premium paid under Part 5 as an example of a payment it includes.

How much deposit can a builder take in South Australia?

For contracts made on or after 1 September 2011, s 30(4) of the Building Work Contractors Act 1995 allows a deposit of not more than $1,000 where the price is less than $20,000, and not more than 5% of the price where it is $20,000 or more. Read on the current version, 9 October 2026.

What deposit can a builder take in WA?

Section 10 of the Home Building Contracts Act 1991 allows a deposit of not more than 6.5% of the total amount payable before work starts, or a prescribed payment such as 20% for cabinetry work with more than 50% off-site work. The Act covers contracts above $7,500 and below $500,000, as at 5 April 2023.

What this analysis
does and does not show.

Evidence note

What it shows: The maximum deposit, the contracts it applies to, the moment it ends and the progress payment rule in the home building Acts of NSW, Victoria, Queensland, South Australia and WA, with Victoria's stage table, as read on 9 October 2026 on each state's legislation register.
Key facts quoted: NSW 10% (s 8) and s 8A for contracts over $20,000 inclusive of GST; Victoria 5% at $20,000 or more, 10% below (s 11), stage table (s 40), opt-out by reg 13; Queensland 10%, 5% and 20% (Sch 1B s 33), level 2 amount $20,000 (Regulation s 45), proportionate claims (s 34); SA $1,000 below $20,000 and 5% at $20,000 or more (s 30(4)); WA 6.5% (s 10), 20% cabinetry (reg 3A).
Derived: Deposit caps on an illustrative $450,000 contract price: $45,000, $22,500 and $29,250, our calculation, ignoring GST and exceptions.

We read the legislation, not the regulators' guidance pages or any tribunal decision. The NSW and SA registers were read through a rendering proxy on 9 October 2026 because the sites block automated access; the text is saved with the article.
Tasmania, the ACT and the Northern Territory are not covered. Their legislation was not read.
Security of payment legislation, retention, cost plus contracts and payment terms between head contractors and subcontractors are not covered.
Victoria's Regulations were read at Authorised Version 004, as at 1 July 2021, the version listed as in force. We did not check for amendments not yet consolidated.
We do not state whether a percentage in Victoria's table is cumulative, how South Australia's two $20,000 lines interact, or whether any particular claim is genuine or proportionate.
Nothing here is legal or financial advice, and it does not determine whether any payment is authorised.

Bring us one contract's payment schedule.

Send us a residential contract's payment schedule and the dates each claim was raised. We will show you which statutory rule each scheduled receipt maps to, and which receipts are dated before the stage, evidence or certificate the Act names.

This article is general information about published legislation. It is not legal or financial advice and it does not determine whether any deposit or progress payment is authorised. It covers NSW, Victoria, Queensland, South Australia and Western Australia only. All provisions are as read on 9 October 2026 at the versions listed in the sources.

Send us the schedule · Finance & cash flow agent

Sources

Suggested citation: Home Building Act 1989 (NSW), Domestic Building Contracts Act 1995 (Vic), QBCC Act 1991 (Qld) Schedule 1B, Building Work Contractors Act 1995 (SA) and Home Building Contracts Act 1991 (WA), at the versions listed, as read 9 October 2026. Derived figures: the deposit caps on an illustrative $450,000 contract price ($45,000, $22,500, $29,250), our calculation.

The deposit cap is the small number. The progress payment rule shapes the cash flow.