How Much Petty Cash Should You Keep?

How Much Petty Cash Should You Keep? (Quick Answer)

Most small businesses keep between $100 and $500 in petty cash. The right amount depends on your weekly cash spending and how often you replenish. The simple formula is: weekly cash spending × weeks between replenishments × 1.25 buffer. A typical office float is $150–$300 (replenished bi-weekly); a busy retail shop or café runs $200–$500 (weekly).

Petty Cash Float Formula

There is no universal “correct” amount. The right float depends on one thing: how much cash your team actually spends between replenishments.

Example: Your team spends about $60 per week on small cash purchases. You replenish every two weeks. The formula gives: $60 × 2 × 1.25 = $150. Round up to $150 or $200 for clean denominations.

If you do not know your weekly spending yet, start with an estimate, track for one month, then recalculate with real data.

$100 Petty Cash Float Breakdown (Suggested Denominations)

If you are setting up a $100 float, here is a practical denomination mix that handles most small purchases without constant change-making. The goal: enough $1s and $5s to make change for typical $5–$30 purchases.

Denomination	Quantity	Subtotal
$20 bill	1	$20
$10 bill	3	$30
$5 bill	5	$25
$1 bill	20	$20
Coins (mixed)	—	$5
Total float	—	$100

For a $200 float, double the bill counts and keep coins around $5–$10. For a $500 float, add four to five $20 bills on top of the $200 mix — you rarely need anything larger than a $20 in petty cash, since bigger purchases should go on a card or invoice.

Tip: Whatever the breakdown, log every withdrawal and return as it happens. The float only stays accurate if every movement is recorded — ideally with a cloud petty cash tool that timestamps and attributes each transaction.

Typical Amounts by Business Type

Business Type	Team Size	Typical Float	Replenishment
Solo freelancer / home office	1	$50–$100	Monthly
Small office (admin, marketing)	3–10	$150–$300	Bi-weekly
Retail shop or café	5–15	$200–$500	Weekly
Construction / field crew	5–20	$300–$750	Weekly
Event / catering company	10–30	$500–$1,000	Per event
Nonprofit / community org	2–10	$100–$300	Bi-weekly

These are ranges, not rules. A construction crew that buys all materials on account may need less than a three-person office that pays cash for daily parking and supplies. Use the formula with your actual numbers — the easiest way to get them is a digital petty cash book that logs every withdrawal as it happens.

Signs Your Float Is Too High

• More than 60–70% of the float remains at replenishment time — you are keeping cash that sits idle and creates unnecessary risk
• The same bills stay in the box for weeks — if the same $20 bill is still there after three replenishment cycles, the float is too large
• You feel nervous about the amount in the box — if losing the box would cause real financial pain, reduce the float
• Insurance does not cover the amount — many business policies cap cash theft at $200–$500. If your float exceeds your coverage, reduce it or increase your coverage

Fix: Reduce the float by 25–50%. Track for two weeks. If the box still does not run dry, reduce again. Keep going until the float matches actual spending.

Signs Your Float Is Too Low

• The box runs dry before the scheduled replenishment — people need cash and there is none, so they use personal money and seek reimbursement (which defeats the purpose of petty cash)
• Emergency replenishments happen regularly — if you are making unscheduled bank trips to top up the box, the float is too small
• Staff stop using the system — if the box is always empty, people give up on it and pay out of pocket without logging anything. You lose visibility completely.

Fix: Increase the float by 25–50% and shorten the replenishment cycle. If the box runs dry every week, either double the float or replenish twice a week.

When to Adjust the Float

Your float is not a set-it-and-forget-it number. Review it quarterly and adjust when circumstances change:

• Team grows or shrinks — more people means more small expenses. Fewer people means less spending.
• Seasonal spikes — holiday season, summer events, end-of-year projects. Temporarily increase the float for busy periods, then reduce it when things normalize.
• New expense patterns — if the team starts buying lunch supplies or the office moves to a location with paid parking, spending patterns change.
• You switch from cash to card for some expenses — if supplies now go on a company card, petty cash spending drops and the float should shrink.
• Policy changes — raising or lowering the per-transaction limit directly affects how much cash flows through the box.

The Denomination Mix

Once you know the total float, break it into denominations that make the custodian’s life easy. The goal: be able to make change for any common purchase without large bills.

For a $150 float, halve the quantities. For a $500 float, add more $20s and $10s. Avoid $50 and $100 bills — most petty cash purchases are under $30, and large bills create change problems.

Float vs. Per-Transaction Limit

These are two different numbers. The float is the total amount of cash in the box. The per-transaction limit is the maximum amount anyone can take out in a single withdrawal — typically $50 to $75.

Both should be defined in your petty cash policy. A high float with a low per-transaction limit is fine — it just means the box lasts longer between replenishments. A low float with a high per-transaction limit is risky — two large withdrawals can empty the box.

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