How much deposit should I pay a contractor?
There is no single rule for commercial works, but the principle is to keep payments in line with work actually done. A large up-front deposit increases your exposure if the contractor fails. Link payments to measurable milestones or monthly valuations, keep a retention where appropriate, and for larger contracts consider asking for a performance bond, commonly around 5 to 10 percent of the contract sum. See the guide on the Security of Payment Act for the statutory payment-claim process.
From the RRD Field Guide, checked against the sources cited in How to Choose and Verify a Contractor in Singapore: Licences, Registration, Insurance and Red Flags. General information, not advice for your project.
The fuller picture
Check four things before you award building works in Singapore: the BCA builder's licence (Class 1 general builders have no value limit; Class 2 is limited to projects of S$6 million or less), the BCA Contractors Registration System workhead and grade, bizSAFE status, and insurance certificates. Then protect yourself with progress-linked payments, a performance bond where justified, and a programme you can monitor.
More questions on this topic
- What is the difference between a GB1 and a GB2 licence?
- Does my renovation contractor need a BCA builder's licence?
- What do CW01 and CR01 mean in BCA's directory?
- Is CRS registration the same as a builder's licence?
- How do I check a contractor's bizSAFE level?
- What insurance should a contractor have?
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