Why deposits protect you
A deposit is a payment the client makes before you start work, usually a share of the total project fee. It does three useful things. It protects your cash flow, because you are paid for part of the work before you spend weeks on it. It reduces your risk, because if the client disappears halfway through or the project is cancelled, you are not left with nothing. And it filters clients: someone who is serious about working with you will usually pay a reasonable deposit without fuss, while someone who resists hard may become a payment problem later. Deposits are standard in many fields, from design and photography to building work and events. Asking for one is not a sign of distrust. It is simply how professional businesses manage risk on larger jobs.
How much to ask for
There is no single right amount, but most freelancers and small businesses ask for somewhere between 25 and 50 percent of the project fee. For a €2,400 website project, a 50 percent deposit is €1,200 upfront, with the remaining €1,200 due on completion. For larger or longer projects, a staged structure often works better, such as 30 percent upfront, 40 percent at a midpoint milestone and 30 percent on delivery. Ask for a higher share when you have costs to cover early, such as buying materials, booking a venue or subcontracting part of the work, or when the client is new and you have no payment history with them. For small jobs, a deposit may not be worth the extra invoice; it is often simpler to bill the full amount on short terms.
When to ask
The right time to mention a deposit is before the client says yes, not after. Put it in your quote or proposal, alongside the price and timeline, so the client agrees to it as part of the deal. Then repeat it in your contract or terms: how much the deposit is, when it is due, that work starts once it is received, and what happens to it if the project is cancelled. Asking for a deposit for the first time after the client has accepted can feel like a new condition, which is when clients push back. When it is part of your standard terms from the start, most people accept it without question. Our guide on invoice payment terms covers how to write the rest of your terms.
Wording you can copy
Keep the request short, confident and matter-of-fact. In a proposal, a line like this works: 'The project fee is €2,400. A 50 percent deposit of €1,200 is due on acceptance, and the remaining €1,200 is due on delivery, payable within 14 days. Work is scheduled to begin once the deposit is received.' When you send the deposit invoice, the email can be equally simple: 'Hi Sara, thanks for confirming the project. Attached is the deposit invoice for €1,200, as outlined in the proposal. Once it is paid I will lock in the start date of 3 June and send over the kickoff questionnaire. Let me know if you have any questions.' There is no need to apologise or explain why you ask for deposits. Stating it as your normal process is enough.
How to invoice a deposit
A deposit should have its own invoice, with its own number, sent when the client accepts. The description should make clear what it is, for example 'Deposit, 50 percent of website project as per proposal dated 20 May'. Payment terms on a deposit invoice are usually short, often due on receipt or within 7 days, since work cannot start until it is paid. When the work is finished, send a final invoice that shows the full project fee, then deducts the deposit already paid, leaving the balance due. In the example, the final invoice lists the website project at €2,400, less the deposit of €1,200 received on 24 May, balance due €1,200. This makes the history easy to follow for both you and the client, and keeps your records clean.
Refundable or non-refundable?
Decide in advance what happens to the deposit if the project does not go ahead, and write it into your terms. Many freelancers make deposits non-refundable once work has started, on the basis that they have reserved time and turned down other work. Others refund the deposit minus the value of work already done. Some keep a part to cover costs already incurred, such as materials or bookings. Whatever you choose, be clear. If a project is cancelled and you refund all or part of a deposit, issue a credit note against the deposit invoice rather than deleting it, so your records show what happened. Consumer protection and contract laws affect what you can keep, particularly when your clients are private individuals, and rules differ by country, so check what applies to you.
Deposits, VAT and tax timing
A deposit is usually treated as a real payment for tax purposes, not a loan. If you are VAT registered, many VAT systems treat an advance payment as the point at which VAT becomes due on that amount, which means the deposit invoice normally needs to show VAT just like any other invoice. For income tax, on cash basis, the deposit counts as income when you receive it; on accrual basis, it is often treated as income when the related work is done, with the deposit held as a liability until then. This can matter at year end, when a large deposit received in December may fall into a different tax year from the work itself. Rules differ by country, so check with your tax office or accountant how deposits are treated where you are.
What to do when a client refuses
Most clients accept a reasonable deposit, but occasionally one will push back. Start by asking why. A large company may have a policy against paying before delivery, which you can sometimes solve with milestone billing instead: invoice the first milestone after a short initial phase, such as a week of work. A new client may simply be cautious, in which case a smaller deposit or a shorter first stage can build trust. If the client refuses any form of upfront or staged payment on a large project, think carefully. It does not always mean they will not pay, but it does mean you carry all the risk. For projects above a certain size, many freelancers treat a deposit as non-negotiable. Our guide on pricing freelance work covers building terms into your quote.
Deposits built into your invoices
Kelvo Books supports deposits directly on your invoices. Add the deposit when you create the project invoice, share the public invoice page so the client can see exactly what is due, and Kelvo keeps track of what has been paid and what is still outstanding, so there is no manual subtraction at the end. Payment terms, automatic reminders on Pro and credit notes for cancellations are all in the same place, and every payment flows into your live profit and loss and cash flow. The free plan includes 10 invoices a month, unlimited clients and expenses, and the P&L. Pro at €7 a month adds unlimited invoices, reminders, recurring billing and the @kelvo.app email inbox. Start at books.kelvo.app and get paid before the work starts.