On construction draws, the owner withholds retainage — a percentage held back until completion. Compute the amount withheld and the net payment on each progress billing.
The example
$50k draw, 10% retainage.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | Billing | 50000 |
| 3 | Less 10% held | → $45,000 |
The formula
The formula:
How it works
How it works:
- Retainage is a percentage (often 5–10%) the owner holds from each progress payment.
- Net payment this draw =
billing × (1 - retainage_percent). - The amount withheld is
billing × retainage_percent— it accrues across draws. - The total held is released at substantial completion (or per the contract’s reduction schedule).
Retainage accrues — track it cumulatively. Each draw adds to the held balance: a running =SUM(retainage_column) shows total dollars withheld to date. Some contracts reduce the retainage rate (e.g. 10%→5%) after the job is half complete, so model the rate per draw rather than hard-coding one number.
Try it: interactive demo
Billing amount and retainage %.
Variations
Amount withheld
Held this draw:
Cumulative held
Across draws:
Final release
Last payment:
Pitfalls & errors
Per draw. Retainage applies to each progress billing, accruing over time.
Rate can step down. Some contracts reduce retainage past 50% complete.
Release at the end. The held total is paid at completion — track it carefully.
Practice workbook
Frequently asked questions
How do I calculate retainage in Excel?
What is retainage in construction?
How do I track total retainage held?
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