Upon termination of a contract before any work is done how much can a contractor keep

If he has breached the contract by not performing, you would be entitled to terminate the contract. Essentially, at that point, the law allows you to get the work performed by another contractor, and your previous contractor would be entitled to the difference in cost. If the cost is less, your previous contractor would be entitled to his contract amount less the amount that it cost you to do the work.

I would take the position at this point that he must refund all the monies to you because it was not earned and because he has incurred no costs.

It depends upon your Contract terms amd the work that has been performed to date. For example, there may be some staging and materials costs that hyave been incurred by the Contractor of which you're not aware. Are there applicable re-stocking costs? The terms of the Contract could affect the outcome as well. For example, do you have audit rights? Does the Contract address an up-front deposit or other nonrefunable amounts? You should have an attorney review the Contract and discuss with you.