First 10 customers: 6 months free.4 spots still open.
Claim your spot
Free tool
Retainage Calculator
Plug in your contract numbers and see how much retainage is being held, what you should be owed, and when you can ask for release.
The full signed contract amount for this project, before change orders.
Usually 5% to 10%. Set by the contract, capped by state law.
Total billed across all pay applications, including the current period.
Cash actually received. Do not count retainage being held back.
Some contracts allow partial retainage release after a project completion threshold (often 50%).
Your retainage breakdown
Retainage withheld to date
$25,000
10.00% of $250,000 billed
Should have received
$225,000
Billed amount minus retainage
Payment delta
$0
You're current or ahead on payments
Current billing progress
50.0%
$250,000 billed of $500,000 contract
Final retainage owed
$50,000
What comes back at substantial completion if you bill the contract in full
Eligible for release at 50%?
Yes
Your billing crossed the partial-release threshold. Check the contract for the exact trigger.
Math runs in your browser. Nothing is sent to a server. The figures above are estimates based on the numbers you entered, not legal or accounting advice.
What is retainage?
Retainage is the slice of every pay application the owner or general contractor holds back until the job is substantially complete. The typical rate is 5% to 10%, set by the contract and capped by state law. On a $500,000 contract with a 10% retainage rate, $50,000 stays in the owner's pocket until the punch list is closed and final lien waivers are signed.
The reason it exists: pressure. Retainage gives the paying party cash to finish the job if a contractor walks off, refuses warranty work, or leaves defective work behind. The cost: every link in the contract chain runs on tighter cash than the schedule of values suggests. A sub billing $100,000 on a 10% retainage job is actually getting $90,000 in the bank that month.
Rules vary by state. California caps retainage on public works at 5%. Texas allows up to 10% on private commercial work. Florida steps it down once a project crosses 50% completion. Read your contract first, then check the statute.
How to use this calculator
- 1. Enter your total contract value. Use the signed contract amount before change orders. If you want to model change orders, add them to the total.
- 2. Set your retainage rate. Pull this number from the contract. Most jobs are 5% or 10%. Don't guess. If the rate is wrong, every output below it is wrong.
- 3. Enter cumulative billed to date. This is the total of every pay application you've submitted, including the current one. Not the per-period amount.
- 4. Enter cumulative payments received. The cash that actually hit your account. Do not include retainage being held back. That's the whole point of the math.
- 5. Set the partial release threshold. 50% is the default because that's when many contracts allow a step-down. Adjust if your contract names a different trigger.
- 6. Read the breakdown. If the payment delta is negative, you've been paid less than the billed-minus-retainage figure. That's usually a billing error, an unpaid pay app, or an unagreed deduction. Surface it.
Common mistakes
Counting retainage as “received.” The single most common bookkeeping error. Retainage is income you have the right to bill, but it's not cash in the bank. Track it as a separate receivable line. If you mix it into your regular A/R, you'll think you're flush when you aren't.
Forgetting the partial-release trigger. Many contracts allow retainage to step down from 10% to 5% (or from 5% to 0%) after the project crosses a completion threshold. Subs often miss this. The owner won't volunteer to cut the held amount. You have to ask in writing once you cross the line.
Mismatched billing periods. If your accounting system runs on a fiscal month but your pay applications run on a calendar month, the cumulative-billed and cumulative-paid figures can drift. Reconcile them to the same cutoff date before you trust any retainage report.
Releasing retainage before lien waivers are signed. For GCs releasing retainage to subs: do not cut the check without a signed final unconditional lien waiver. Once retainage is gone, the pressure to collect that waiver goes with it.
How retainage rules vary by state
Retainage is governed by state law on public projects and policed by state prompt-pay statutes on private work. The cap you can withhold, the timing of release, and who has the right to ask for early release all change at the state line. Don't assume what works in California works in Texas.
The five states below cover most of LienDone's pilot footprint. Each link goes to a detailed page with statutory citations and the actual lien waiver forms you need on that state's projects.
- California
5% on most public works; private contracts set their own rate.
- Texas
Up to 10% on private commercial work; 5% on public projects.
- Florida
10% before 50% completion, 5% after, on most public projects.
- New York
5% on public works under State Finance Law §139-f.
- Arizona
Capped at 10% until 50% completion, then capped at 5% on the remainder.
A few patterns hold everywhere. Public projects tend to be more tightly regulated than private. Prompt-pay statutes usually give the paying party 30 to 45 days after substantial completion to release the held funds. Lien rights stay alive until retainage is paid in many states, so don't sign a final unconditional waiver while retainage is still outstanding. If you're working across state lines, treat each project under its own state's rule book.
Frequently asked questions
What is retainage in construction?
Retainage is a percentage of each pay application that the owner or general contractor holds back until the project hits substantial completion. The typical rate is 5% to 10%. It exists to give the paying party a cushion if punch-list work is incomplete, defective, or abandoned. The held funds are released after the work is signed off, lien waivers are in, and any contract milestones are met.
How much retainage is normal?
Five percent is the most common rate on commercial projects, and 10% shows up on smaller jobs or on subcontract tiers where the GC wants more cushion. Public projects often cap retainage by statute. California holds 5% on most public works, Texas allows up to 10% on private commercial work and 5% on public projects, and Florida limits retainage to 10% before 50% completion and 5% after. Read your contract first, then check your state's statute.
When do I get retainage back?
On most contracts, retainage is released at substantial completion once the punch list is closed, final lien waivers are signed, and any required closeout documents are turned in. Many state prompt-pay statutes give the paying party a fixed window (often 30 to 45 days) to release retainage once those conditions are met. If your contract is silent, the statute fills the gap.
Can retainage be released early?
Yes, in two common ways. First, many contracts allow a partial reduction once the project hits a completion milestone, typically 50% billed. Second, some states require partial release on long jobs even without a contract clause. The calculator's partial release threshold flags when you've hit that bar. Ask the GC or owner in writing — partial release rarely happens without a paper request.
How is retainage taxed?
Retainage is income in the year you have the right to receive it, not the year it's withheld. If you're on the accrual method, you generally book retainage receivable when you bill it. If you're on cash basis, you book it when it's released and paid. Your accountant will want to see retainage tracked separately from regular A/R so it shows up correctly on the balance sheet. This is general guidance, not tax advice.
Does retainage apply to subcontractors too?
Yes. Most GCs pass retainage down to subs at the same rate the owner holds on them. So if the owner withholds 10% from the GC, the GC typically withholds 10% from each subcontractor on that project. Some states (California is one) require a flow-down match — the GC can't hold more from the sub than the owner holds from the GC. Check the prime contract and the subcontract together.
Track every retained dollar across every project
The calculator answers the question for one project. LienDone answers it across all of them. Send waivers, collect signatures in two minutes, and release payment the moment a sub clicks submit.
LienDone Inc. — lien waivers signed in minutes, not weeks.