CONTRACTOR GLOSSARY · MONEY & BILLING
What is 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, 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.
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 closeout paperwork. 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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