Retainage Calculator

A free retainage calculator, including step-downs

Enter the contract sum, what has been completed, and the retainage schedule. This works out the rate in effect, what is being held, and what a step-down releases — the number people most often get wrong.

Prospective or retroactive: the whole question

A contract that drops retainage from 10% to 5% at half completion can mean two very different things, and the difference is real money:

Prospectively

The lower rate applies only to work billed after the threshold. Everything held at the higher rate stays held until final release. Nothing is released the month you cross the line.

Retroactively

The lower rate is applied to everything completed to date, so crossing the threshold releases the difference immediately — often a substantial cheque.

Neither is standard. It is decided by the wording of your contract, and it is worth reading that sentence rather than assuming. This tool asks you which one applies and shows both consequences.

What retainage is actually for

It is security that the work will be finished and finished properly — not a discount, not a fee, and not the other side's money. It is yours, held. That framing matters at the end of a job, when releasing it becomes a negotiation it was never supposed to be.

Statutory caps

Several states limit retainage on private or public work, and a rate above the statutory cap is unenforceable there regardless of what the contract says. If your rate is above 10%, it is worth checking your state before relying on it — this tool flags that.

What it does not do

It calculates one contract at a point in time. It does not track retainage across every subcontractor on a project, watch for the milestone that triggers a step-down, or tell you when release conditions have been met. That is the paid product.

Frequently asked

What is retainage?

A percentage of each construction payment withheld until defined milestones or completion, so the owner has leverage to get the work finished and punch-list items closed.

How much retainage is normal?

Commonly 10% on progress payments, often stepped down to 5% at substantial completion, but limits vary by state and by contract.

When is retainage released?

Typically at substantial completion for the bulk, with the remainder released at final completion or after the lien window closes, depending on the contract and state law.

Can retainage be released early?

Often yes. Early-release clauses return part of it on certification of substantial completion or on substitution of a completion guarantee. A step-down schedule models exactly this.