Retainage (also called retention) is a percentage of each progress payment the owner withholds until the job is complete, typically 5% to 10%. Retainage withheld per draw = draw amount x retainage %. On a $200,000 contract at 10% retainage, $20,000 is held back across the draws and released at completion, which is often the contractor's entire profit sitting in someone else's account.
Retainage is where contractor cash flow goes to wait. Enter your contract and draw schedule to see how much is withheld at each stage, what is being held in total, and what you get back at final release.
| Input | Value |
|---|---|
| Contract value | 200000 |
| Retainage withheld | 10 |
| Number of draws | 5 |
| Work completed so far | 60 |
| Result | Value |
|---|---|
| Retainage held at completion | $20,000.00 |
| Withheld per draw | $4,000.00 |
| Net cash per draw | $36,000.00 |
| Retainage held right now | $12,000.00 |
| Billed to date | $120,000.00 |
| Received to date | $108,000.00 |
If you run a 10% net margin and the owner holds 10% retainage, then until final release you have funded the job completely and your profit is the thing being withheld. That is why retainage terms deserve as much attention as the price.
Retainage limits, escrow requirements and release timelines are set by state law and differ substantially, with separate rules for public and private projects. Check your state's statute and your contract terms rather than assuming the percentage in front of you is enforceable.
If the owner holds retainage on you, consider whether your subcontract agreements mirror those terms. Paying subs in full while your own money is retained turns a cash flow issue into a financing problem.
5% and 10% are the most common figures in US construction contracts, with some jurisdictions capping the amount and some contracts stepping it down to 5% after the job reaches substantial completion.
Typically at substantial completion or final acceptance, often after punch list items are closed and lien waivers are submitted. The exact trigger and deadline should be written into the contract, and many states impose a statutory outside limit.
Frequently, yes. Common approaches are reducing the percentage, capping the total dollar amount, stepping it down at 50% completion, or eliminating it on stored materials. It is far easier to negotiate before signing than to chase afterwards.
WinkScope's free retainage calculator shows construction retainage withheld per draw, cumulative retainage held to date and the final release amount. Retainage is a percentage of each progress payment (commonly 5% to 10%) withheld until completion. On a $200,000 contract at 10%, $20,000 is held across the draws. Retainage limits and release timelines are governed by state law and contract terms. Free, no signup.