Retainage

Retainage is a portion of each progress payment — commonly 5 to 10 percent — that an owner withholds from a contractor until the project is complete or reaches a defined milestone. It is held back as security that the work will be finished properly.

Retainage is standard on commercial and public construction, written into the contract and tracked on every payment application. General contractors typically pass the same retainage down to their subcontractors.

Because retainage is deducted from each payment and released only at the end, it has a real effect on cash flow that estimators and contractors have to plan around. Carrying it correctly from the schedule of values through each billing period is part of keeping the money side of a job accurate — the kind of continuity Quotr helps maintain.

For subcontractors, retainage can tie up a meaningful share of profit for months, so tracking it matters. For owners, it is leverage to ensure punch-list work actually gets done.