Draw Schedule for a $400,000 Job
Each progress draw
$80,000.00
10% deposit at signing, four equal progress draws, 10% final payment at completion, no retainage held.
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How that number is worked out
These are the figures this page was built with and every line the calculator produces from them. Change anything above and all of it moves.
- Contract amount400000 $
- Deposit at signing10 %
- Number of progress draws after the deposit4
- Final payment at completion10 %
- Retainage held from each draw0 %
Each progress draw$80,000.00
| Deposit at signing | $40,000.0010% |
|---|---|
| Draw 1 | $80,000.00cumulative $120,000.00, 30% of contract |
| Draw 2 | $80,000.00cumulative $200,000.00, 50% of contract |
| Draw 3 | $80,000.00cumulative $280,000.00, 70% of contract |
| Draw 4 | $80,000.00cumulative $360,000.00, 90% of contract |
| Final payment at completion | $40,000.0010% |
The draw schedule this produces
| Deposit at signing | 1 |
|---|---|
| Progress draw 1 | 1 |
| Progress draw 2 | 1 |
| Progress draw 3 | 1 |
| Progress draw 4 | 1 |
| Final payment at completion | 1 |
Number of progress draws compared
More draws means smaller amounts more often, which is usually easier to collect and always easier to survive.
| Number of progress draws | Each progress draw |
|---|---|
| 2 draws | $160,000.00 |
| 3 draws | $106,666.67 |
| 4 draws | $80,000.00 |
| 5 draws | $64,000.00 |
| 6 draws | $53,333.33 |
What else matters here
Forty thousand at signing, four draws of $80,000, forty thousand at completion. Eight draws pays $40,000 a time, and at 10 percent retainage the four draw version nets $72,000 each with $32,000 released at closeout.
At this value somebody who was not in the sales meeting reads the payment schedule: a lender, an attorney, an owner's representative. What they test is whether each payment is roughly matched to the cost incurred by that point, and a schedule that is not will be renegotiated at the worst moment, which is after you have won the work and before you can start it.
Be able to show the match. Take the cost estimate you already built the price from, mark where each milestone falls, and check that cumulative payments never run far ahead of cumulative cost. Front loading is not automatically wrong, and a first draw that is heavy because $90,000 of material is bought in week one is defensible when you can point at the purchase orders. A first draw that is heavy because you wanted the cash is not defensible, and the reviewer can tell the difference, because the same evidence that justifies one exposes the other.
What this calculator assumes
- Several states cap the deposit a residential contractor may take, some at 10 percent and some at a flat dollar figure. Check your own state before you write a bigger number here.
- Draws should follow milestones you can point at, not dates. "On completion of rough in inspection" is collectable. "On 15 October" is an argument.
- A final payment under 10 percent gives the customer no reason to sign off, and one over 20 leaves you funding their job.
Questions people ask
What is a normal draw schedule for a $400,000 job?
A 10 percent deposit of $40,000, four progress draws of $80,000 each, and a $40,000 final payment. With 10 percent retainage the draws net $72,000 and $32,000 is released at closeout.
Is front loading a draw schedule acceptable?
Only where the cost is genuinely front loaded and you can show it. Map cumulative payments against cumulative cost from your own estimate, and be ready to produce the purchase orders. A heavy early draw backed by evidence gets approved, and one that is not gets the whole schedule reopened.
How big should the final payment be?
Ten to twenty percent. Under 10 percent and the customer has no real reason to sign off and release you. Over 20 percent and you are funding their job through the punch list, which is the slowest and most argumentative part of any project.
The payment schedule calculator takes any dimensions you like and hands back the same list.