Retainage Calculator and Payment Application Template

Enter the contract sum, the work done to date and your contract's retention rate, and the calculator shows the retention held, the amount due now and the release at completion. The same layout comes as a blank Excel payment application.

Calculator

Result

Amount due this application: £0.00
Gross value to date: £0.00
Retention held: £0.00
Advance repaid to date: £0.00
Net value to date: £0.00
Release at completion: £0.00
Release after the defects period: £0.00

Download this calculation

This tool is an aid. It does not replace the contract, the regulations or the supervising engineer.

Blank payment application template

A payment application with cumulative values, retention and advance lines, the amount due this period and two release lines, plus an instructions sheet. The layout is our own, not a copy of a published contract form.

Download the payment application (.xlsx)

File: payment-application-template.xlsx. Excel workbook (.xlsx) with formulas and no macros; it opens in Excel, LibreOffice and Google Sheets.

The tools and templates are aids for planning and record keeping. They do not replace your contract, the applicable regulations or the supervising engineer.

Worked example: an interim payment with retention and an advance

Contract sum 500,000, retention 10 % with a cap of 5 % of the contract sum, half of the retention released at completion. These are example contract values and the inputs of our calculation test.

Gross value to date: work done 220,000 + approved variations 15,000 + materials on site 10,000 = 245,000.
Retention: 245,000 × 10 % = 24,500. The cap is 500,000 × 5 % = 25,000, so it does not bind and 24,500 is held.
Net to date: 245,000 − 24,500 − advance recovered 20,000 = 200,500.
Due this period: 200,500 − previously certified 140,000 = 60,500.
Release: 24,500 × 50 % = 12,250 at completion and the remaining 12,250 after the defects period.
With a cap of 4 % instead: 500,000 × 4 % = 20,000 is below 24,500, so retention is 20,000 and 65,000 is due.

Result: retention held 24,500, amount due this period 60,500, released later as 12,250 + 12,250.

How retention and the amount due are calculated

Everything is cumulative to date, so each application corrects the one before it.

Gross value: V = work done to date + approved variations + materials on site
Variations may be negative (omissions); the gross value may not.
Retention: R = min(V × rate, contract sum × cap)
The cap is optional. Without one, retention is simply V × rate.
Amount due: P = V − R − advance recovered to date − previously certified
A negative result means more was certified before than is due now; the calculator warns instead of hiding it.
Release: R1 = R × share released at completion; R2 = R − R1
Both the share and the timing of the release are contract terms.

Where retention rules come from

What we cite for each market, and what those sources do not say.

Market	What we cite	What it says, and what it does not
UK	Construction Act (HGCRA 1996), s. 109 and s. 110A	Periodic payments and payment notices; no retention rate, which is a contract term
UK, proposal	Commercial Payments Bill, introduced in May 2026	Proposes to ban withholding retention in construction contracts; not law when we checked
US, federal contracts	FAR 32.103 and 52.232-5(e)	Retainage only for unsatisfactory progress, at most 10 %, paid promptly on completion
US, state and private work	Your contract and state law	No single figure; we cite none
Australia	AS 4000, by name only	Security is a contract term; we do not quote the standard
International	FIDIC Red Book 2017, clauses 14.3 and 14.9 (as described in published commentary)	Rate and limit from the contract data; release in two halves

Rates, caps and release shares in the calculator are always your entries.

Guide

Retention rules differ by country and contract

Retention, called retainage in the US, is the part of each payment the client holds back as security for completing the work and fixing defects. We know of no single legal rate for private contracts in any market we cover, so the rate, any cap and the release dates come from your contract.

In the UK, the Housing Grants, Construction and Regeneration Act 1996, usually called the Construction Act, gives a right to stage or periodic payments unless the work is to last less than 45 days (section 109). Section 110A requires the contract to provide for a payment notice no later than five days after the payment due date, stating the sum considered due and how it was calculated, which may be zero; where the contract does not comply, the Scheme for Construction Contracts applies. The Act sets no retention rate. A pay less notice is the related notice for paying less than the notified sum; we do not state its timing here.

In May 2026 the UK government introduced the Commercial Payments Bill, which proposes to ban withholding retention payments in construction contracts, with a transition period and without retroactive effect. It is a proposal, not law, and when we checked it was not in force. Until it is, retention is whatever your JCT, NEC or bespoke contract says.

In the US, federal contracts follow the Federal Acquisition Regulation: under FAR 32.103 and the clause at 52.232-5(e), part of a progress payment may be retained only if progress is not satisfactory, at most 10 %, and the retained amount is paid promptly once the contract is completed. States set their own rules and private contracts vary, so there is no single national figure.

Australian contracts based on AS 4000 deal with security in the contract itself; we name the standard only. Under the FIDIC Red Book 2017, as described in published commentary, retention is deducted at the rate in the contract data up to a limit (clause 14.3) and released in two halves, after the Taking-Over Certificate and after the Defects Notification Period (clause 14.9).

How to prepare a payment application

Work cumulatively. Start from the total value of work done to date, measured or assessed against the contract sum, not just this period's work. Add approved variations, which may be negative for omissions, and materials on site if your contract pays for them before they are built in.

Apply the retention rate to the cumulative gross value. If the contract caps retention at a percentage of the contract sum, enter the cap; the calculator takes the smaller amount and tells you when the cap applies.

Deduct the advance payment recovered so far, then everything certified in earlier applications. What is left is due this period.

Enter the share of retention released at completion. The calculator starts with an example share of 50 %; replace it with your contract figure. The rest is shown as the release after the defects or rectification period.

Add tax if your invoice shows it, then submit the application with the supporting measurements. In the UK, watch the payment notice dates in your contract; in the US, follow the pay application procedure of the owner's contract.

Cap, cumulative values and common mistakes

Retention is the smaller of the gross value times the rate and the contract sum times the cap. In the worked example, 10 % of 245,000 is 24,500, below the cap of 25,000, so 24,500 is held; with a 4 % cap the limit of 20,000 would bind instead. The amount due is the cumulative net value minus what was certified before: 200,500 − 140,000 = 60,500.

Retention on this period only, added to earlier deductions: this works only if nothing earlier changed; cumulative values correct mistakes automatically.
A cap defined on a different base: in this calculator the cap is a share of the contract sum; if your contract defines it otherwise, convert it first.
Forgetting earlier advance recovery: enter what was recovered in earlier applications as well, or the net value is overstated.
Rounding too early: amounts are rounded to cents only in the result lines, and the two release amounts always add back to the retention held.
A negative amount due: earlier certificates paid more than is now due; check the previous figures instead of entering zero.

Questions about retainage and retention

What is retainage in construction?

Retainage is the part of each progress payment that the owner holds back until the work is complete, as security for finishing it and fixing defects. It is the US term; UK, Irish and Australian contracts call it retention. The percentage, any cap and the release dates are set by the contract and, on US public work, by federal or state rules.

Is retainage the same as retention?

Yes, the two words mean the same thing. Retainage is used in the US, retention in the UK, Ireland and Australia. The calculator works the same way for both: a rate on the cumulative gross value, an optional cap as a share of the contract sum, and a release in two parts at completion and after the defects period.

What retention rate is normal?

There is no single figure we can source for private contracts in any market we cover. On US federal contracts the FAR allows at most 10 %, and only when progress is unsatisfactory; states and private contracts set their own rules. In the UK the Construction Act sets no rate at all. Use the rate written in your contract.

Is retention being banned in the UK?

Not yet. The Commercial Payments Bill, introduced in May 2026, proposes to ban withholding retention payments in construction contracts, with a transition period and no retroactive effect. When we checked, it had not become law. Until it does, retention depends on your contract; check the current status of the bill before relying on either answer.

How is the amount due on a payment application worked out?

Take the cumulative gross value of work done, approved variations and materials on site, deduct retention and the advance recovered to date, and subtract everything certified before. In the worked example, 245,000 − 24,500 − 20,000 − 140,000 = 60,500. Working cumulatively means a mistake in one application is corrected in the next.