CONTRACTOR GLOSSARY · MONEY & BILLING
What is a Retainage?
Retainage is the percentage of each progress payment (commonly 5–10%) held back until project completion — the last money a subcontractor sees on a job.
Retainage is withheld from every requisition as the owner's (and GC's) lever to ensure completion: bill $100,000 at 10% retainage and $10,000 waits until the end. Across a year of jobs, a small sub can easily have tens of thousands sitting in other people's accounts as accumulated retainage.
The release conditions are where subs get hurt: final completion, punch-list clearance, closed permits, lien waivers, as-builts — each an item someone can point to while holding your money. Two habits shrink the pain: know exactly how much retainage is outstanding per job (it's your money — track it like a receivable), and clear the release conditions you control (sign-offs, punch items, closeout docs) the moment work completes.
Watch the lien calendar. Retainage often pays out months after last work, and in many states the lien deadline runs from last work — meaning your lien rights can expire before your retainage is even due.
Common questions
What is a typical retainage percentage?
5–10% of each progress payment is common, sometimes dropping (e.g., to 5% or zero) after substantial completion, depending on the contract and state rules.
When is retainage released?
Per the contract — typically at final completion, conditioned on punch-list clearance, closed permits, and final lien waivers. Subs usually wait on the GC's release from the owner.
Related terms
RevnuPros tracks the thing, not just the word
Permits to sign-off, T&M tags to signature, materials to billed through, retainage to released — built for subcontractors. Browse the full contractor glossary or the Massachusetts permit guide.
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