Retainage Calculator
Calculate construction retainage and your net progress payment. Enter the contract amount, percent complete, and retainage rate — with optional tiered reduction — to get the amount withheld, the net payment due this period, and the cumulative retainage held. Free, no sign-up.
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Explanation
A retainage calculator shows how much of a progress payment the owner holds back and what is actually paid this period. Retainage (or retention) is money you have earned but that is withheld until the job is substantially complete — a cushion against defects and non-completion. Knowing the held balance and the net payment due keeps your cash-flow projections honest, because the last few percent of a contract can sit unpaid for months.
How retainage is calculated
Retainage is a flat percent of the work earned to date. The held balance accumulates as the job progresses, so each pay application withholds the difference between the cumulative retainage owed now and what was already held.
retainage held = earned to date × retainage rate ÷ 100
this period net = this period earned − this period retainage
| Term | Meaning |
|---|---|
| contract | Total contract or schedule-of-values amount |
| completed% | Work completed to date, as a percent of contract |
| retainage rate | Percent withheld from each payment (commonly 5% or 10%) |
| net payment | This period’s earnings minus this period’s retainage |
Common rates and tiered reduction
Most contracts withhold 5% or 10%. A common arrangement starts at 10% and drops to 5% once the job is half complete, which releases part of the held balance back to the contractor. Many states cap retainage by law, and on federal work the Federal Acquisition Regulation lets the owner hold up to 10% until satisfactory progress is shown.
| Arrangement | Rate | Notes |
|---|---|---|
| Standard flat | 5% or 10% | Held on every payment until release |
| Tiered | 10% → 5% | Reduces at 50% complete; releases part of the balance |
| State-capped | ≤ 5% | Several states cap the allowable percentage |
| Federal (FAR) | ≤ 10% | Until satisfactory progress is achieved |
Progress payments and the cumulative balance
Retainage carries forward from one pay application to the next. Each period adds new retainage on the work completed that period, and the cumulative balance grows until a release event. This calculator tracks both the single-period figures (what is withheld and paid now) and the running totals (retainage held to date and paid to date), so a pay application reconciles cleanly. With a tiered reduction, crossing the threshold lowers the held balance on the full work-to-date, which is why some retainage is returned at that milestone.
Notes and limitations
Retainage rules are set by the contract and by state law — allowable percentages, whether retainage applies to stored materials, and the release deadline (often 30–60 days after substantial completion) all vary. This tool computes the standard percentage math; always confirm the terms and timing in your contract and your state’s prompt-payment statute. Separate retainage may be tracked per subcontractor on the schedule of values.