What Is a Payment Schedule for Building Work?
What a payment schedule should show, why the best ones are tied to finished work rather than dates, and how to agree one before the job starts.
The short answer
A payment schedule sets out how much you pay, when, and what has to be done before each payment falls due. The clearest ones tie every payment to work you can see.
Every building job has a payment schedule, even if nobody calls it that. On a small repair it might be a single line in the quote: payment on completion. On a larger project it could be a deposit, several stage payments and a final balance. Either way, it is the part of the agreement that decides when money changes hands.
A good schedule supports the working relationship as much as the budget. The contractor knows when they will be paid and can plan their materials and labour. You know what you are paying for at each point, and you are never far ahead of the work.
This guide covers what a payment schedule should show, how to set one up for different sizes of job, and how to handle changes along the way. For the wider picture, see our guide to building quotes and payments.
What to look for
What a clear payment schedule shows
If you can answer each of these from the quote or contract, the schedule is doing its job.
The total price
The full agreed price for the work, stating whether VAT is included. Every payment in the schedule should add up to this figure.
Each payment as an amount
A figure for each payment, or a clearly stated share of the total, so there is no calculating or guessing when an invoice arrives.
What triggers each payment
The stage of work that has to be finished before the payment is due, such as the roof being weathertight or the walls reaching a stated point.
Who you pay, and how
The company the payment is made to and the accepted methods. If a company other than the contractor receives payments, the paperwork should explain why.
How changes are handled
How extra work or changes you ask for will be priced and added, and at which payment they will be charged.
What happens at the end
When the final balance falls due, and whether any part is held back afterwards as a retention. If nothing is held back, the schedule simply ends at completion.
Milestones or dates
Tie payments to finished work
Most schedules use one of two triggers. The first keeps payments in step with progress. The second can let them drift apart.
Payments tied to stages
- Due when a defined piece of work is finished
- You can see what you are paying for
- Payments move with the work if it runs late
- Easy to check against the quote
- Fair to the contractor when work goes quickly
Payments tied to dates
- Due on a calendar date, finished or not
- Weather or delays can put you ahead of the work
- Harder to link each payment to progress
- Can lead to awkward conversations mid-job
- Simpler to write, but less clear in practice
By size of job
What a sensible schedule looks like
Small jobs. For a repair or a short, single-visit job, payment in full on completion is common and perfectly reasonable. Some contractors ask for a deposit where materials have to be ordered specially, such as a made-to-measure rooflight. Our guide to building deposits explains what a deposit is for and what to look for.
Medium jobs. For something like a full roof replacement, a deposit on acceptance and the balance on completion is a familiar pattern. The deposit secures the start date and covers the contractor's commitment. The balance is paid once the work in the quote is finished.
Larger projects. For an extension or a project that runs over weeks or months, a deposit is usually followed by stage payments as defined parts of the work are completed, and a final balance at the end. Our guide to staged payments goes through how to define the stages so everyone agrees when each one is reached.
Whatever the size, the principle is the same. Each payment should follow the work it pays for, and nobody should be far ahead: neither you in paying, nor the contractor in working unpaid.
Setting it up
Agreeing a schedule before you accept
Read the payment terms in the quote
Most quotes state them. If yours does not, ask for them in writing before you accept anything.
Check every payment has a trigger
For each payment, ask what has to be finished first. If the answer is a date, ask whether it could be a stage instead.
Check the upfront amount
Ask what the deposit covers. A deposit that reflects materials and securing the start date is easy to understand. Our answer on how much deposit a builder should ask for covers the principles.
Agree how extras are charged
Extra work should be priced in writing before it is done, and the schedule should say when it will be paid.
Confirm who receives payment
Check the company name, the payment method and the bank details, and confirm details through a number you already trust.
Keep the agreed version
Save the accepted quote or contract with the schedule in it. It is the reference point for every invoice that follows.
During the job
Keeping payments in step with the work
The most common strain on a schedule is a request to pay early. Sometimes there is a good reason: a supplier needs paying before materials are released, or a stage is almost finished and the contractor has bills to meet. Talk it through. If you agree to a change, confirm it in writing so the rest of the schedule still adds up.
Where an early payment is for materials, it is reasonable to ask for them to be delivered to your property first, or for a copy of the supplier's order. That keeps the payment linked to something real.
Changes you ask for are the other common reason a schedule moves. Each change should be priced before the work is done and added to the schedule, usually at the next stage payment or the final balance. Our guide to variations and extra costs sets out how to handle them without surprises at the end.
Keep a simple running record: each payment, the date, the amount, what it was for, and the confirmation or receipt. If you ever need to check where things stand, the record will answer it in a minute.
The details
Getting the small print right
Describe each stage so nobody can argue about it. "First fix complete" means something precise to a builder and very little to most homeowners. Ask for each stage to be described in plain words, so you can both see when it has been reached.
Look carefully at the upfront amount. A deposit is normal on many jobs, and it should be explained by something concrete, such as ordering materials or securing a start date. Our answer on whether it is normal to pay a deposit goes through what is usual.
Decide at the start whether anything is held back. If you want part of the price kept for a period after completion, that is a retention, and it has to be agreed before work starts. Retention on building work explains how to do it fairly.
Know who each payment goes to. If a company other than the builder receives payments, the schedule and the terms should say why and on whose behalf. Paying an agent vs paying the contractor explains the difference.
Pay in a way that leaves a record. A bank transfer or card payment shows the date, amount and recipient. Match each one to its invoice and keep them together.
Much commercial construction is covered by statutory payment rules under the Housing Grants, Construction and Regeneration Act 1996. Contracts with a homeowner for work on their own home are generally outside those rules, so a domestic payment schedule depends mainly on what you and the contractor agree. That is a good reason to have it in writing. This is general information, not legal advice.
At the end
The final payment
The last payment is the one people think about most, because it closes the job. The fairest approach is to walk round the finished work with the contractor, agree a list of any small items still to do, and pay the balance on completion as the schedule says. Our answer on what payment on completion means explains the term.
If something in the quote is genuinely unfinished, it is reasonable to talk about it before paying and to keep back an amount that fairly reflects what is left. Holding the whole balance over a minor item usually makes it harder, not easier, to get it done. Should you pay before work is finished? covers where that line sits.
Working with Mortaro
A simple, two-part schedule
When Mortaro coordinates your project, the payment terms are set out in your written quotation before you commit: a 25% deposit to secure the works, and the balance on completion. Nothing is paid before you accept, and the site visit and quotation are free.
Your quotation names the appointed main contractor, an independent company from our network. They carry out the work, and your construction contract is with them. Both payments are made to your contractor. We receive them as the contractor's payment administration agent and pass them on without unnecessary delay. We do not hold client funds.
You pay by bank transfer. Payments explained sets out each step, and how quotations work shows where the payment terms appear in your quotation.
Straight answers
Questions about payment schedules
Does every building job need a payment schedule?
Every job has one, even if it is a single line saying payment on completion. What matters is that it is in writing and that you understand it before you accept the quote.
Can I ask to change the payment schedule?
You can ask, ideally before you accept. Contractors plan materials and labour around their payment terms, so expect a conversation rather than an automatic yes. A change agreed after acceptance should be confirmed in writing.
What if the contractor asks for a payment before a stage is finished?
Ask what it is for. If it is for materials, it is reasonable to ask for them to be delivered first or to see the supplier's order. If you agree, confirm the change in writing so the rest of the schedule still adds up.
Is a deposit part of the payment schedule?
Yes. It is usually the first payment, made when you accept the quote, and it counts towards the total price rather than being an extra charge.
Should the payment schedule include VAT?
It should be clear whether each figure includes VAT. If the contractor is VAT-registered, the total and every payment should show it consistently, so the payments add up to the price you accepted.
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