Progress Billing and Retainage
Work out what this month draw is worth after retainage, what the owner is holding, and the cash position the job has put you in.
Retainage on private commercial work in the US is typically 5 to 10% of each progress payment, released at completion. The deposit and the retainage together decide most of your cash position.
How the math works
- Deposit: money taken at signing. It is the only cash on the job that arrives before you spend, and on a residential project it usually covers mobilization and the first material buy.
- Retainage: the owner pays 90 or 95 cents on each progress payment and keeps the rest until completion. 10% is the common commercial number in 2026, 5% is common on later draws and on residential work.
- Net due this draw: work in place minus retainage. At 45% complete with 10% retention, you bill $83,250 and collect $74,925.
- Cash position: deposit plus net billings minus the money you have actually paid out. A negative number means the job is funding itself poorly and the gap is coming out of the company line, not out of the job.
- Retainage is a loan to your customer: on a $185,000 contract at 10%, the owner is holding $18,500 of your money at completion, released when punch list and lien waivers clear. A 45 day release clock on that number is a real financing cost.
- Progress billing: bill by percentage complete with a schedule of values line for each division. Bill weekly on jobs under 8 weeks, monthly on longer work, and never let billed to date trail costs paid out.
Is 10% retainage standard?
On commercial private work, 10% is the standard starting point in 2026 and many contracts step it down to 5% once a project is more than half complete with the subcontractors performing. Residential custom work more often uses payment milestones with no retainage, which transfers the leverage into the deposit.
How do I finance the retainage?
You do not: you price it. If the job runs 10% retainage for 90 days after completion, that money is carrying a cost. On a $185,000 job at 10%, the retained $18,500 held for a quarter is real money, and it belongs in the bid before you sign.
What if the owner never releases retainage?
Demand it in writing with the completion date, then treat the retainage as a debt with the same clocks as any other unpaid balance: the lien and bond claim windows in your state start on your own last day of work, not on the day the retainage was promised.