Finance & Contracts

Retainage

A percentage of each progress payment withheld until the project is complete, typically 5–10%.

Retainage (or retention) is money the owner holds back from each progress payment as security against incomplete or defective work. Typically 5–10% per draw, released at substantial completion or after the warranty period. State laws vary on maximum retainage percentage and how quickly it must be released. Subcontractors who don't track retainage owed to them often write it off as a loss.