Retainage calculator

Work a progress payment the way a payment application lays it out. Enter the contract sum, the work completed and materials stored to date, your retainage percents, previous payments and any retainage being released. The calculator shows the retainage held, the amount released and the payment due.

Payment application

Contract sum to date, with approved changes ($)Work completed to date ($)Materials stored, not yet installed ($)Retainage on completed work (%)Retainage on stored materials (%)Previous payments ($)Retainage released now (% of held)

Total earned (work + stored): $540,000.00
Percent complete (earned ÷ contract): 63.53%
Retainage on completed work: $51,000.00
Retainage on stored materials: $3,000.00
Retainage held to date: $54,000.00
Earned less retainage: $540,000.00 − $54,000.00 = $486,000.00
Less previous payments: $391,500.00
Payment due this application: $94,500.00
Balance to finish (contract − earned): $310,000.00
Still to be paid on the contract: $364,000.00

The retainage percents and the release are your inputs. They come from your contract, and the rules on retainage differ by state and by owner. Enter 0 for the contract sum to skip percent complete and the balance.

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This is covered in Procurement, contracting and running the business of the Bid Bond course.

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The formula: earned, less retainage, less what was paid

Retainage is part of each progress payment that the owner holds back until the work is finished or a set point is reached. It is cumulative: each application works from totals to date, not from the period alone.

Total earned = work completed to date + materials stored.
Retainage held = work completed × work percent + materials stored × stored percent.
Released = retainage held × release percent, and the retainage still held drops by that amount.
Payment due = total earned − retainage still held − previous payments.
Balance to finish = contract sum − total earned. Add the retainage still held to get what remains to be paid on the contract.

A common slip is taking retainage on completed work only when the contract retains on stored materials too. The calculator has a separate percent for each, so you can set stored materials to 0 when the contract says so.

Worked example 1: a mid-job payment application

The contract sum is $850,000. Work completed to date is $510,000 and materials stored are $30,000. The contract retains 10% on both. Previous payments total $391,500. These are invented study numbers.

Total earned = 510,000 + 30,000 = $540,000, which is 540,000 ÷ 850,000 = 63.53% complete.
Retainage = 510,000 × 0.10 + 30,000 × 0.10 = 51,000 + 3,000 = $54,000.
Earned less retainage = 540,000 − 54,000 = $486,000.
Payment due = 486,000 − 391,500 = $94,500.
Balance to finish = 850,000 − 540,000 = $310,000. With the $54,000 still held, $364,000 remains to be paid.

Check: 540,000 × 0.90 = 486,000, and 850,000 − 486,000 = 364,000 = 310,000 + 54,000.

Worked example 2: releasing retainage at the end

The same job is finished: work completed is $850,000, nothing is stored, and the 10% retainage is $85,000. Previous payments total $765,000. The owner releases all retainage (100%). Released = $85,000, retainage still held = $0, earned less retainage = $850,000, and the payment due is 850,000 − 765,000 = $85,000. If the owner released only half (50%), $42,500 would stay held and the payment due would be 807,500 − 765,000 = $42,500. Check: 42,500 + 42,500 = 85,000. These are original arithmetic examples, not exam questions.

Retainage questions

Is retainage always 10%?

No. The percent is set by the contract, and the rules on retainage differ by state and by owner. Enter the figure your contract or the question gives.

When is retainage released?

When the contract says, often at substantial or final completion, sometimes in steps. Enter the share being released on this application as a percent of the retainage held to date.

Where is this on the NASCLA exam?

The Bid Bond course teaches payment applications and retainage in its Procurement and Contracting Requirements lesson. That is the largest of the twelve subject areas on the NASCLA outline, with 31 of the 115 scored questions.

See the NASCLA exam outline for all twelve subject areas and their question counts.