In construction, few things cause more tension than money. Clients want value, clarity, and protection. Builders need timely payments, cost coverage, and cash flow stability. At the centre of all this lies a critical, often underappreciated tool: the construction payment schedule.
Whether you’re building a home, renovating a kitchen, or managing a multi-phase commercial site, a clear, fair, and professional construction payment schedule keeps everyone aligned. Yet many projects in the UK still suffer from vague or poorly structured payment terms — leading to disputes, delays, and in some cases, complete breakdowns.
This guide offers a detailed, UK-specific look at how to structure deposits and payment stages that protect both parties. We’ll explore industry norms, smart tools like BuilderExpert’s estimating system, and best practices that leading professionals follow. Whether you’re a builder or a client, this article is your complete roadmap.
What Is a Construction Payment Schedule?
A construction payment schedule outlines when and how payments will be made during the course of a building project. Unlike lump-sum payments or loose verbal agreements, payment schedules break the total cost into defined, measurable milestones.
Why Payment Schedules Matter
A proper payment schedule ensures that:
- Builders get paid for progress, not promises
- Clients only pay for completed work
- Disputes are minimised with clear written expectations
- Project cash flow aligns with the work cycle
- Financial risk is spread across stages
🔗 Learn more about the quoting process in Professional Builder Quotes.
How a Payment Schedule Differs From an Invoice or Quote
- Quotes define the estimated cost of the full project
- Invoices request payment for work already done
- A construction payment schedule establishes the timeline and structure of all upcoming payments
Each stage of the schedule is tied to progress: specific tasks, material delivery, inspection sign-offs, or certification milestones.
Common Construction Payment Schedule Templates (UK)
While every builder will tailor their structure, here’s a common UK payment breakdown:
| Project Milestone | Typical Payment |
|---|---|
| Booking deposit | 10–15% |
| After groundwork/foundations | 20% |
| After framing and structural completion | 20% |
| Roofing, insulation, weatherproofing | 20% |
| First fix electrics/plumbing + plastering | 15% |
| Final completion and snagging | 10% (minus retention) |
Some builders may include additional milestones, like “lock-up stage,” “kitchen fit-out,” or “certified inspection passed,” depending on the size and complexity of the build.
🔗 JCT Standard Contracts often include detailed payment schedule templates used by professional UK builders.
Deposits: How Much and When?
A deposit is the first payment a builder receives to begin preparation and secure the client’s project on their schedule.
UK Norms for Construction Deposits
- Small jobs (<£10,000): 10–20% upfront
- Medium projects (£10,000–£100,000): 10–25%
- Large-scale builds: 5–15% depending on lead time and complexity
Why Deposits Matter
For builders:
- Covers planning, mobilisation, and initial material costs
- Shows client commitment
- Helps cash flow while preparing teams and suppliers
For clients:
- Shows they are serious about the project
- Can negotiate schedule, timelines, and costs more securely
⚠️ Red flag: Any demand for 50%+ upfront without detailed breakdowns or contract terms should be questioned.
What Makes a Construction Payment Schedule Fair?
A fair payment schedule balances builder cash flow with client risk protection. It is tied to real, measurable progress and aligns with work being delivered.
Key Ingredients:
- Written contract with a payment schedule attached
- Milestones based on physical deliverables, not arbitrary dates
- Retention clause (e.g. 5% held back until post-handover)
- Defined steps for variations, changes, or delays
- A process for dispute resolution if disagreement arises
Without a solid payment schedule, misunderstandings are almost guaranteed. Fairness doesn’t mean 50/50 — it means realistic, traceable structure.
Legal Requirements and Contractual Backing
In the UK, while there’s no one legal requirement for every construction payment schedule, it is strongly advised to:
- Attach it to a written contract (JCT or RIBA forms preferred)
- Comply with the Construction Act 1996, which outlines payment rights
- Include clear due dates, payment triggers, and dispute steps
Key Points from the Construction Act:
- Clients have the right to regular progress payments
- Builders must issue a payment notice
- Disputes may be handled via adjudication or court if necessary
Case Study: A Fair Payment Schedule in Action
Project: Rear extension on a London home (£85,000 value)
Builder: Certified UK residential contractor
Client: Family of four, needed dining/kitchen upgrade
Payment Schedule:
- 10% deposit upon contract signing
- 20% after demolition and foundations
- 20% after framing and external walls complete
- 20% after roof and insulation finished
- 15% after plumbing, wiring, and plastering
- 10% upon final inspection
- 5% retention, released 3 months post-handover
Outcome:
- Both parties had confidence
- No late payments
- Builder used BuilderExpert’s platform to auto-generate invoices and milestone alerts
- Post-project feedback rated communication 5/5
Digital Tools for Construction Payment Schedule Management
Gone are the days of tracking payments with spreadsheets or emails. Tools like BuilderExpert automate much of the process:
Features to Look For:
- Estimate-to-payment linking (milestones generated from your quote)
- Client-side approval with timestamped sign-offs
- Real-time notifications when payments are due
- BoQ integration so progress = payment
- Retention tracking and reminders
Digital tools also help generate a paper trail — crucial for compliance, VAT, and dispute protection.
Red Flags and Risk Areas
While most builders and clients are reasonable, these warning signs should never be ignored:
Builders Should Be Wary If:
- Clients refuse to pay a deposit
- Requests to delay scheduled payments without clear reason
- Clients constantly changing scope mid-project but resisting cost adjustments
Clients Should Be Wary If:
- Builder demands 30%+ upfront without breakdown
- No written schedule or unwillingness to provide one
- Builder resists including a retention clause or formal contract
A solid construction payment schedule backed by mutual understanding avoids most of these issues from the start.
🔗 Also see: Managing Client Expectations in Construction
FAQs About Construction Payment Schedules
Can I refuse to pay a deposit?
You can, but most reputable builders won’t proceed without one. It helps them cover early costs and shows your commitment.
Should I withhold final payment until defects are fixed?
Yes — that’s what retention is for. Typically 2.5–5% is held until a post-handover snag list is resolved.
Is it okay to pay based on time (e.g. weekly)?
No. Always pay based on progress, not time. Time-based schedules lead to disputes and don’t reflect actual deliverables.
What happens if a payment is late?
Penalties, paused work, or even contract termination may apply. Use software that sends automatic reminders and logs all transactions.
Builder Tip: How to Present Your Payment Schedule to Clients
If you’re a builder, remember that clients may not be familiar with industry terms or trust easily. Here’s how to professionally present your schedule:
- Include it in your formal quote
- Explain each milestone and what’s delivered
- Offer examples of previous clients who followed the same structure
- Provide a PDF or digital timeline with visuals
- Let them know how it aligns with BuilderExpert’s system for live tracking
This positions you as a professional and trustworthy contractor, increasing the likelihood of being chosen over competitors.
Client Tip: How to Negotiate a Better Payment Schedule
If you’re a homeowner or developer, don’t be afraid to ask questions. You can:
- Request smaller initial deposits
- Ask for an itemised milestone list
- Suggest adding a retention
- Use Google Reviews, Checkatrade, or TrustMark to verify builder reliability
- Cross-reference the schedule with the BoQ for consistency
Extra: How Payment Schedules Relate to Bills of Quantities
If your builder uses a Bill of Quantity (BoQ) — as they should — each payment milestone can be directly tied to line items in the BoQ.
This method allows for item-level tracking, helping both parties:
- See what’s been delivered
- Avoid scope confusion
- Quickly adjust for variations or extras
When BoQs and payment schedules are aligned, disputes drop dramatically.
Conclusion
A clear, written, and mutually agreed construction payment schedule is one of the most powerful tools in any builder–client relationship.
It promotes:
- Transparency
- Trust
- Timely payments
- Fewer disputes
- Better project outcomes
By structuring your schedule around realistic milestones, using digital tools to track it, and communicating clearly, you create a framework that’s fair, flexible, and future-proof.
Whether you’re a builder aiming to impress clients, or a homeowner protecting your investment, make sure your next project starts with a professional construction payment schedule.
✅ Ready to take the guesswork out of payments?
Explore how BuilderExpert’s smart estimating software helps you create estimates, BoQs, and construction payment schedules that keep your projects on track — from day one.
Or follow us on:
