Retainage in Construction: What Is Held Back, and When Do You Get It?
Retainage (also called retention) is the part of each progress payment that the owner or general contractor holds back until the job, or your part of it, is finished. Contracts commonly set it at 5% or 10% of each payment. It is released at the end, once the work is complete and the conditions in your contract are met, and in some states a statute sets the outer limit on how long it can be held.
| Question | Short answer |
|---|---|
| How much is held? | Whatever your contract says, often 5% or 10%, within any cap set by state law or the public agency |
| When is it paid? | After completion or acceptance, on the schedule in your contract and any statute that applies |
| Can you lien for it? | Generally yes, it is part of your unpaid balance, but the lien deadline still runs from your last day on the job |
| How do I calculate it? | Work completed to date × retainage percentage. Use the retainage calculator |
How retainage works on a pay application
Each month you bill for the work completed. The payer deducts the retainage percentage and pays the rest, so the held amount grows with every application. On a $100,000 contract with 10% retainage and $40,000 of work done, $4,000 is held and $36,000 is earned. If you have already been paid $27,000, the application should ask for $9,000. The retainage calculator runs these numbers for any contract.
Retainage usually flows down the chain. If the owner holds 10% from the general contractor, the general contractor typically holds the same from each sub, and some subs hold it from their suppliers. That is why a sub who finished early in the job can wait months for the last 10%: the money is tied to the whole project closing out.
Why owners and general contractors hold it back
Retainage gives the payer leverage to get punch-list items, closeout documents, warranties and lien waivers delivered. It also gives them a fund to fix defects if a contractor walks off the job. For the contractor it is the opposite: it is earned money you finance for the length of the project, and it is often your profit margin.
When retainage must be released: state examples
Release timing comes from your contract first, then from any statute that applies. Statutes differ by state and by public or private work. Two examples read from the statute text today:
| State and work type | What the statute says | Source |
|---|---|---|
| Texas, private work | The owner must retain 10% of the contract price or of the value of work done, during the work and for 30 days after the work is completed | Tex. Prop. Code 53.101 (read 2026-11-01) |
| Washington, public works | Retainage may not exceed 5% of the moneys earned, and the public body must release it 60 days after completion of all contract work, subject to the conditions in the statute | RCW 60.28.011 (read 2026-11-01) |
Many other states set caps or release deadlines, and some charge interest on late retainage. Check the statute for your state and project type, and read the retainage clause in your subcontract, because it often ties your release to the owner's acceptance of the whole project.
Protecting retainage you have not been paid
- Track your lien deadline from your last day on the job. Waiting for retainage does not pause the clock. If you finish in March and retainage is due in September, your lien window may close before the payment is late. Check it with the lien calculator.
- List retainage as an exception on every waiver. A final or unconditional waiver signed without an exception can give up your right to the held amount.
- Ask for a line-item release. If your scope finished early, ask the general contractor to release your retainage when your work is accepted, not when the whole project closes.
- On bonded and public jobs, watch the bond claim date. It is often the only remedy, and it also runs from your last furnishing.
Retainage vs other payment holds
| Hold | What it is | When it ends |
|---|---|---|
| Retainage | A fixed percentage of every payment | Completion and closeout |
| Backcharge | A deduction for work the payer says it fixed or completed for you | Negotiated or disputed |
| Pay-when-paid delay | The general contractor waits for the owner's payment before paying you | When the owner pays, or after a reasonable time. See pay when paid vs pay if paid |
LienWarden keeps the lien and bond claim dates for every project in one list, so held retainage stays collectible. Your first project is free. Start free.
Questions people ask
What is retainage in construction?
Retainage is the part of each progress payment that the owner or general contractor holds back until the work is complete. It is released at the end if the conditions in the contract are met.
What is a typical retainage percentage?
Contracts commonly set 5% or 10%. Some states cap it. For example, Washington caps retainage on public works at 5% of the moneys earned (RCW 60.28.011).
How long can retainage be held?
It depends on your contract and your state. Texas requires owners on private work to hold 10% until 30 days after the work is completed (Tex. Prop. Code 53.101), and Washington requires public bodies to release it 60 days after completion of all contract work, subject to the statute's conditions (RCW 60.28.011).
Can I file a mechanics lien for unpaid retainage?
Generally yes, because retainage is part of your unpaid balance. The lien deadline still runs from your last day of furnishing, not from the date retainage was due, so check your date with the lien calculator.
How do I calculate retainage?
Multiply the work completed to date by the retainage percentage. The retainage calculator also shows the payment due and the balance to finish.
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