California Contractor Deposit Limit (2026): $1,000 or 10%
The most a California contractor can take as a down payment on a home improvement job, quoted from the statute and worked from $5,000 to $60,000.
Not legal advice. General information from each state's statutes, checked Oct 20, 2026. Local rules and the facts of your contract can change the answer; for a specific contract, ask a lawyer licensed in your state.
Set the deposit
Every payment tied to a stage
The deposit and payment schedule in the Clamp app: a $1,000 deposit due when the customer signs, then every other payment tied to a stage of the job. $1,000 on this $17,699 bathroom is under every state's cap. Sample data.
What the law says
“If a downpayment will be charged, the downpayment shall not exceed one thousand dollars ($1,000) or 10 percent of the contract amount, whichever amount is less.”
The maximum deposit, worked
| Contract price | How it works out | Maximum deposit |
|---|---|---|
| $5,000 | 10% of $5,000 is $500 | $500 |
| $8,000 | 10% of $8,000 is $800 | $800 |
| $10,000 | 10% of $10,000 is $1,000 | $1,000 |
| $25,000 | 10% of $25,000 is $2,500, more than $1,000 | $1,000 |
| $60,000 | 10% of $60,000 is $6,000, more than $1,000 | $1,000 |
Above $10,000 the deposit stays at $1,000, so the rest of the money comes from progress payments tied to the work.
Who it covers, the exception and the penalty
Covers
Every home improvement contract between an owner or tenant and a contractor who is licensed or required to be, including the contractor's agent or salesperson. There is no minimum contract size.
The one exception
A performance and payment bond, a lien and completion bond, or a bond equivalent or joint control approved by the registrar, covering full performance and payment. An ordinary license bond does not qualify.
The penalty
A misdemeanor: a fine of $100 to $5,000, up to one year in county jail, or both. In a declared disaster area the court must impose the maximum fine.
California deposit questions
Can a California contractor ask for 50% down?
No. The down payment is capped at $1,000 or 10%, and later payments can't run ahead of the work done and materials delivered, unless the contractor carries the full bond the statute names.
Is a contractor's license bond enough to take a bigger deposit?
No. Only a bond covering full performance and payment, a lien and completion bond, or joint control approved by the registrar lifts the cap.
Did the limit change in 2024?
No. SB 601, effective January 1, 2024, changed disaster-area enforcement. The $1,000 or 10% figure is unchanged.
Compare other states
How we checked
We read each state's statute or licensing rule on the official legislature or agency site and quote it as written. Where the official site would not load, the row says so and names the copy we read. A state stays "still being checked" until we have read the full rule; we never mark it "no cap" before then. Last checked .
This guide explains what the statutes say. It is not legal advice; for a specific contract, ask a lawyer licensed in your state.