Retention is common on commercial and construction contracts, typically 3–5%. Half is usually released at practical completion and the balance after the defects liability (rectification) period, often 6–12 months later. Always check the exact figures and dates in the contract.
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This calculator works out the retention held back on a commercial contract and how it is released. Enter the contract value, the retention percentage and how much is released at practical completion, and it shows what is withheld and when you get it.
It is for tradespeople working on commercial and construction jobs, where the customer or main contractor keeps a slice of every payment as security. Knowing exactly how much is held, and when each part comes back, matters for pricing the job and planning cash flow.
Retention is typically a small percentage of the contract, held in two parts: half released when the work is signed off as practically complete, and the balance released after the defects period, once any snags have been put right.
Retention held = contract × retention%; First release = held × release%; Final release = held − first release
Retention is a percentage of the contract value withheld from payments. A share — usually half — is released at practical completion when the work is accepted, and the remainder is held through the defects liability period and released once any defects have been made good.
Type the value the retention is calculated on. Retention normally applies to the works value; check whether your contract applies it to the whole sum or part.
Enter the retention rate from the contract — commonly 3% or 5% on construction work.
Enter the percentage of the retention released at practical completion. It is usually 50%, with the other half held through the defects period.
The calculator shows the retention held, what you are paid on completion, and the amounts released at practical completion and at the end of the defects period.
Price retention in — it is your money lent to the customer for free. On a 5% retention with half held through a 12-month defects period, you are financing 2.5% of the contract for a year after you have finished. On thin margins that matters, so factor it into the price rather than treating it as a surprise.
Chase the release actively. The final tranche is released at the end of the defects liability period once snags are cleared, but it is notorious for being forgotten — put the release dates in your diary and invoice for it. Unclaimed retention is one of the most common ways trades quietly lose money on commercial work.
The figures live in the contract. Retention percentages, the split, and the length of the defects period all vary between contracts and standard forms. This is a guide to the mechanics; always work from the actual contract terms, and take advice on larger jobs.
Retention is common on commercial and construction contracts, typically 3–5%. Half is usually released at practical completion and the balance after the defects liability (rectification) period, often 6–12 months later. Always check the exact figures and dates in the contract.
Retention is a percentage of each payment — commonly 3% or 5% — that the customer or main contractor holds back as security that the work will be completed and any defects put right. Half is typically released at practical completion and the rest after the defects liability period.
In two stages. The first half is usually released at practical completion, when the work is accepted as finished. The remaining half is held through the defects liability period — often 6 to 12 months — and released once any defects that appear have been made good.
On construction work it is commonly 5%, sometimes 3%, of the contract value. The exact figure, the release split and the defects period length are all set by the contract, so check the terms before you agree to the job and price the held money in.
Keep track of the release dates and invoice for each tranche when it falls due — retention is not usually paid automatically. Clear any snags promptly so there is no reason to withhold the final release, and diarise the end of the defects period so it does not slip through the cracks.
Split a job into a deposit and staged payments.
CIS deducted and net pay on a subcontractor invoice.
Build a quote from materials, labour and margin.
Statutory interest and compensation you can claim on an overdue commercial invoice.
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