When to Pay Your Builder: Payment Schedule & Milestone Guide

Your builder wants 50% upfront before starting work. You feel uneasy, but you don't know what's reasonable. Is this normal? Or are you about to hand over £30,000 and never see them again?

Getting the payment schedule right is critical. Pay too much upfront and you lose all leverage. Pay too little and legitimate builders won't take you seriously. This guide shows you exactly when to pay, how much, and what to demand in return.

Why Payment Timing Matters

Payment schedules aren't just about fairness—they're about protection and incentives.

If You Pay Too Much Upfront:

• You lose leverage – Why should they finish if they've already been paid?
• Project abandonment risk – They take your money and disappear
• Quality drops – No financial incentive to do a good job
• You fund their cash flow problems – Your deposit pays for someone else's project
• Snagging doesn't get done – Final payment is the only thing that motivates snagging completion

If You Pay Too Little:

• Good builders won't take the job – They need working capital for materials
• Delays due to cash flow – They can't buy materials without progress payments
• Rushed work – Waiting too long for payment causes resentment and corners cut

Standard Payment Schedule (Extension/Renovation)

For most home extensions and renovations, this is the industry-standard payment schedule:

Payment Schedule for Smaller Jobs (Under £10k)

For smaller projects like a bathroom refit or kitchen installation:

• Deposit: 10-15% on contract signing
• Materials delivery: 30-40% when materials arrive on site
• Halfway point: 25% when work is 50% complete
• Completion: 25% when finished and you're satisfied

For very small jobs under £3,000, it's reasonable to do 50% upfront, 50% on completion—but never 100% upfront.

Payment Schedule for Large Projects (Over £100k)

For major builds (new house, large extension), use a more granular schedule with smaller percentages per stage:

• Deposit: 5%
• Foundations: 15%
• Superstructure: 20%
• Roof and windows: 15%
• First fix: 15%
• Second fix: 15%
• Landscaping/external: 10%
• Completion and snagging: 5%

More stages = more control = more protection.

What to Check Before Each Payment

Never release a payment without verifying:

Before Deposit Payment:

• Signed contract in place
• Public liability insurance certificate received
• Start date confirmed
• Payment schedule agreed in writing
• Scope of work clearly defined

Before Each Stage Payment:

• Visual inspection: Go to site and see the work yourself
• Building control sign-off: For structural stages, get building control approval
• Materials receipts: If you're paying for materials, see the invoices
• Quality check: Work should be to standard, not just "done"
• Photograph everything: Before releasing payment, document what's complete

Before Final Payment:

• Snagging list complete: Every item addressed
• Building control completion certificate: Must have this
• Guarantees and warranties: For materials, appliances, workmanship
• As-built drawings: If applicable
• Final clean done: Site should be clean and habitable

Red Flags in Payment Requests

Be cautious if your builder:

• Wants 50%+ upfront – Massive red flag, likely cash flow issues
• Asks for payment in advance of work stage – "I'll do foundations next week but need payment now"
• Refuses to provide receipts – Professional builders document everything
• Changes payment schedule mid-project – "Actually I need payment earlier than we agreed"
• Wants payment to personal account, not business – Tax evasion and no legal recourse
• Pressures you to pay immediately – "I need it today or I can't buy materials tomorrow"
• Won't tie payments to milestones – Wants weekly/monthly payments regardless of progress

How to Handle Cash Payments

Many builders prefer cash (often for tax reasons). Cash is legal, but you need protection:

1. Always get a receipt – Handwritten is fine, but must include: name, date, amount, signature
2. Photograph receipt before handing over cash – In case they "lose" it later
3. Note the payment in writing – Text or email confirming: "Paid £5k cash today for stage 2 completion"
4. Match withdrawals to payments – Withdraw exact amounts: need to pay £8k? Withdraw exactly £8k
5. Bank records – Label ATM withdrawals: "Cash for Bob - foundations payment"

What If Builder Demands More Than Agreed Schedule?

Sometimes builders will ask for payment before the agreed milestone. Your response:

"Our contract says payment is due when [milestone] is complete. That's what we both signed. Once the work is done and I've inspected it, I'll pay as agreed."

Don't be bullied. Professional builders understand milestone payments. If they're having cash flow problems, that's not your problem—and paying early won't fix it.

The Only Exception

If they need to order expensive materials (£5k+ of bespoke items), you might agree to:

• Pay the supplier directly (bypassing the builder)
• Go to the supplier with builder and pay together
• Pay builder with receipts showing cost (not just their word)

Never hand over cash or transfers for "materials" without seeing the invoice.

How to Track Payments Properly

Spreadsheets fail. WhatsApp messages get lost. Here's what works:

Use a Dedicated App (Recommended)

Apps like Ted are built for exactly this:

• Record payments in seconds
• Attach receipt photos automatically
• Tag payments by milestone
• See total paid vs. contract value instantly
• Share with partner and builder for transparency
• Export full audit trail if disputes arise

Never Lose Track of Payments Again

Ted is purpose-built for tracking renovation payments. Know exactly what you've paid, what's outstanding, and whether you're ahead or behind. Your builder can see it too, preventing disputes before they start.

If You Must Use a Spreadsheet:

At minimum, track:

• Date of payment
• Amount paid
• Payment method (cash, transfer, card)
• What milestone it's for
• Cumulative total paid
• % of project paid vs. % of work complete
• Receipt reference/photo filename

Retention: The Final 10%

Retention is holding back 5-10% of final payment for 30-90 days after completion. This ensures:

• Snagging gets done
• Any hidden issues surface and get fixed
• Builder has reason to return your calls
• You're protected during initial defects period

Most builders accept retention on £30k+ jobs. Include it in your contract from the start.

What If You've Already Overpaid?

You've paid 70% but only 40% of work is done. Now what?

1. Stop all further payments immediately – You've already paid for work not yet done
2. Document current state – Photograph everything as it stands
3. Written communication – Email stating: "I've paid £X, but value of work complete is £Y. No further payment until we're equal."
4. Seek legal advice if they threaten to stop – You're in a strong position if you've overpaid

Builders who take your money and then stop working are in breach of contract. Don't let them intimidate you.

Special Cases: Day Rate vs. Fixed Price

Day Rate (Time & Materials)

If your builder is on a day rate:

• Weekly or bi-weekly payments – Pay for hours worked and materials receipts
• Timesheets required – Must show who worked, when, and for how long
• Materials receipts mandatory – Never pay for materials without seeing invoices
• Agree maximum total – Day rate doesn't mean unlimited spending

Fixed Price Contract

Stick rigidly to milestone schedule. Builder's costs don't matter—they quoted a price and must deliver.

Building Control and Payment

Link payments to building control inspections:

• Foundations payment: After building control inspection passed
• Final payment: After building control completion certificate issued

This protects you legally—your property complies with building regulations and is sellable/insurable.

Sample Payment Schedule Clause for Your Contract

Include this in your contract:

"Payment shall be made in stages as follows, within 7 days of completion and approval of each stage by the client:

1. £6,000 (10%) on contract signature
2. £15,000 (25%) on completion of foundations and building control approval
3. £15,000 (25%) on completion of walls, roof structure, and window installation
4. £15,000 (25%) on completion of first fix and plastering
5. £9,000 (15%) on practical completion, snagging complete, and building control final certificate issued

Total contract value: £60,000. Client reserves right to withhold payment if work does not meet agreed standards or if milestones are incomplete."

Final Advice

Getting the payment schedule right is as important as choosing the right builder. It protects both parties and ensures the project progresses smoothly.

Remember:

• Never pay for work not yet done
• Always inspect before paying
• Document every payment with photos and receipts
• Final 10-15% is your leverage for completion and quality

If a builder won't agree to a milestone-based payment schedule, they're either unprofessional or planning to exploit you. Walk away and find someone reputable.

Your project will get done. The question is whether you'll pay fairly or get exploited. A proper payment schedule—tracked religiously—gives you control, protection, and peace of mind.

Track Your Build for Free

Keep a complete record of every payment, task, and conversation with your builder. Ted is free to download on iOS and Android.