If there is significant interest in the auction then it is likely to be 10%. Saying that we have had a couple of 5% on auctions through this week but they were for properties in the $1.2m plus range.
Clause 9 of the standard REIQ contract (attached) details the rights and remedies of each party in the case of fundamental breach. Amount of deposit at 5% or less does not alter this (5% is at least what it is going to cost you on a breach by the time you pay commission, marketing and legals etc). If your breach is not fundamental then you may get all of your deposit back.
If you breach a contract condition and the vendor terminates there are actually circumstances where a larger deposit could save you money. Eg, you have a $10k deposit, agree to release to vendor for your breach and do so by a deed stating that no further liability or obligation exists between the parties. You have a $1,000 deposit and breach a condition, vendor terminates and then starts an action to recover damages. The legal fees alone will be way more than $10k. (in latter situation best bet could be to offer to settle straight away and throw another $10k at them). Litigation is expensive, time consuming and has a huge opportunity cost. Avoid it wherever possible.
We have 2 matters in litigation at the moment over deposit forfeiture, termination and damages. Number 3 is about to hit formal litigation also. All of these are due to breach of contract or unlawful or ineffective termination by purchasers. If you have $50k in deposit at stake then litigation is questionable (settle for $25k each, take the money and run), $100k is probably worth it.