Retainage
Retainage (or retention) is a portion of each progress payment that the owner or general contractor holds back until the work is complete, as security that the job gets finished properly.
Updated October 13, 2026 · 1 min read
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How it works
The contract sets a percentage. Each time a progress payment is due, that share is withheld. When the work is done and accepted, the held amount is released, often with the final payment. Rules vary: federal construction contracts, for example, allow retainage when progress isn't satisfactory and cap it at 10 percent of the approved estimate, and many states set their own rules for public and private jobs.
Watch your final waiver
Retainage is often the last money paid, so it's the easiest to lose. Don't sign an unconditional final lien waiver until the retainage has actually cleared. If you must sign a progress waiver while retainage is still held, list it as an exception.
Questions? Answers.
When is retainage released?
When the contract says, usually once the work is complete and accepted, often with the final payment. Some states set deadlines for releasing it, so check your contract and your state's rules.