Retainage in construction
What is retainage in construction?
Retainage is the portion of an otherwise earned construction payment withheld until a defined completion or release condition is met.
Definition
Retainage, also called retention, is calculated as a percentage or fixed amount held back from progress payments. The gross value of completed work and the amount currently payable are therefore not the same figure.
A proper record keeps the withheld balance visible by invoice and project until the contractual release conditions are satisfied. Applicable percentages, limits, deadlines and notices depend on the contract and jurisdiction.
Retainage is withheld payment, not a price reduction
The contractor may already have earned the amount. It remains receivable until release rather than disappearing from the contract value. A deduction or credit changes the amount owed; retainage changes when part of it is paid.
Use the term in practice
How project billing keeps retainage visible
The free calculator shows gross payment, retained amount and current payout. In the project file, invoices and payments keep the commercial records behind those figures connected instead of hiding the outstanding balance in a note.