An up-front payment collected when a contract is signed, typically 10-30% of the contract value.
A deposit signals customer commitment and gives the contractor cash to order materials and lock in their schedule. Most states cap deposits on residential contracts — California is the strictest at style="max-width:780px;margin:0 auto;padding:48px 24px;font-family:system-ui,-apple-system,sans-serif;line-height:1.55;color:#0f172a",000 or 10%, whichever is less; many states allow much more.
The deposit isn't a profit advance — it's working capital. Treat it as the customer's money until you've earned it by ordering materials or doing work that matches the deposit amount.
If a customer cancels before work starts, your deposit refund obligation depends on what you've already spent (non-refundable supplier orders, custom materials) and your contract language. Spell it out at contract time.