What Is a Progress Payment?
A progress payment is a partial payment made to a builder or contractor at agreed milestones during a building project. Rather than paying the full contract price at the start or end, payments are tied to the completion of specific stages of work. This approach protects both parties — the homeowner avoids paying for work not yet done, and the builder maintains cash flow throughout the project.
Common Payment Stages
For a typical residential build, progress payment stages usually follow this pattern:
- Deposit — paid at contract signing (subject to deposit limits)
- Base/slab stage — when the concrete slab or foundations are complete
- Frame stage — when the structural frame, roof trusses, and fascia are installed
- Lock-up stage — when external walls, roof covering, windows, and external doors are installed
- Fixing stage — when internal linings, cabinetry, and fit-out items are installed
- Practical completion — when the building is substantially complete and ready for occupation
Each payment is typically calculated as a percentage of the total contract price. The exact percentages and stages should be clearly defined in your building contract.
State Variations
| State/Territory | Maximum Deposit | Regulated Payment Schedule? |
|---|---|---|
| QLD | 5% (for contracts over $20,000) | Yes — prescribed stages |
| NSW | 10% (up to $20,000 contract) / 5% (over $20,000) | Yes |
| VIC | 5% | Yes — prescribed stages |
| WA | 6.5% | Yes — prescribed stages |
| SA | No prescribed limit | Recommended stages |
How It Relates to Licence Verification
Progress payments should only be made to licensed builders who are completing work in accordance with the contract and building standards. If a builder requests payment significantly ahead of the work completed, or cannot demonstrate they hold a current licence, treat this as a warning sign. Use TradieVerify to verify your builder’s licence before signing the contract and making the first payment.