Retainage calculator for construction progress payments
Shows how much retainage comes off this progress payment, how much is held in total against the contract ceiling, and the date the balance falls due.
Retainage calculator for construction progress payments: run the calculator
Retainage on this progress payment
The form opens on a contract that is 60 % complete with half of it already billed. Overwrite any figure to match your own job and the result follows.
Formula: the balance held is the lower of the ceiling and the retainage rate applied to the work completed to date, with the part above the completion threshold carried at the reduced rate. What comes off today is that balance minus the retainage already held.
Retainage balance and release date
Withheld from this progress payment$4,250.00
- Completion reached
- 60.0%
- Work completed on the chosen basis
- $510,000.00
- Rate applied to the work completed
- $46,750.00
- Ceiling on total retainage
- $85,000.00
- Balance held after this payment
- $46,750.00
- Retainage already held
- $42,500.00
- This payment before retainage
- $85,000.00
- Payment due now
- $80,750.00
- Same rate on the other tax basis
- $4,250.00
- Retainage falls due
- December 30, 2026
The ceiling is not reached yet: $38,250.00 of headroom is left before it binds.
With no tax rate entered, both bases give the same amount.
The contract clause decides the base, the ceiling and the release date. This is arithmetic on the figures entered above, not legal advice.
Retainage calculator for construction progress payments: what it answers
Retainage is the slice of every progress payment an owner keeps until the job is finished and accepted. Ten percent is the usual starting figure on private work, five percent on much public work, and more than thirty-five states now regulate it by statute. The percentage looks small on a single application for payment; across a contract it is often the whole profit line, sitting in someone else's account for months after the crew has left the site.
This calculator takes the contract value, the work completed to date and the amount already billed, then applies the rate, the reduction that many contracts and statutes trigger at fifty percent completion, and the ceiling on total retainage. It returns the amount held back from the current payment, the running balance and the release date. Change the tax rate and it also shows what the same percentage costs when it is taken from the tax-inclusive figure.
Retainage calculator for construction progress payments: how the result is worked out
Retainage is calculated on cumulative work, not on the single invoice. The work completed to date is multiplied by the rate; where a contract steps the rate down after a completion threshold, the part above that threshold carries the lower rate. The result is limited to the agreed share of the contract value. Subtract the retainage already held on earlier applications and the difference is what comes off today's payment.
Two conventions exist for the step-down and they give different answers. Under the first, the lower rate applies only to work billed after the threshold and the money already held stays put. Under the second, the whole cumulative amount is recomputed at the lower rate, so crossing the threshold releases cash. State statutes are written both ways and so are private contracts, which is why the switch sits in the form rather than being decided for you.
Retainage calculator for construction progress payments: what the result assumes
Earlier applications are assumed to have been withheld under the same rule. The retainage already held is derived from the amount billed to date rather than entered separately, so a job whose clause changed mid-contract needs a manual correction.
Sales tax is added to the full value of the work. Retainage reduces the payment, not the tax, so where construction services are taxed the tax falls due long before the withheld money comes back.
The release date shown is acceptance plus the period you enter. That period is contractual: prompt-payment statutes commonly give the owner thirty to sixty days from final completion, while a warranty holdback runs a year or more.
Approved change orders belong in the contract value. Left out, the ceiling is measured against the wrong base and the calculator reports a lower balance than the owner is actually entitled to hold.
Retainage calculator for construction progress payments: questions and answers
How much retainage can be withheld on a construction contract?
Ten percent of each progress payment is the traditional figure and still common on private work. Public work is often five. More than thirty-five states now regulate the ceiling, several of them requiring a reduction once the job is half complete, so the contract clause and the state statute both have to be read.
When is retainage released?
Usually at final completion, once punch list work is signed off and lien waivers are in. Prompt-payment statutes commonly set thirty to sixty days from that point. A contract that holds part of the money through the warranty period pushes the balance out by a year or more.
Is retainage calculated before or after sales tax?
That is a contract question rather than an arithmetic one. Applying the rate to the tax-inclusive figure withholds more money, by exactly the tax rate. The calculator carries both bases and prints the difference, because a clause that says only ten percent leaves the base open to argument.
Can a bond replace retainage?
Many contracts allow a retainage bond or a letter of credit in place of cash. The owner keeps the security, the contractor keeps the working capital, and the premium is the price of the swap. Substitution has to be agreed in the contract, ideally before the first application for payment.
Retainage calculator for construction progress payments: use it on your own projects
Inside Home Builder Software the same calculation reads the project file, so the figure carries the budget, the awards and the invoices behind it instead of asking you to retype them.