Skip to content
BizBinder
Early access open Get early access

Popular in the binder

Can’t find it? Tell us what you were after →

Getting paid

Retention (Retainage)

The short answer

Retention is a slice of a job’s price, commonly around five percent, that a client withholds until after completion or a defects period ends — proof the work holds up, not a discount you gave away.

What it means

Retention, also called retainage, is a slice of the agreed price that a client — usually a main contractor on a bigger job — holds back rather than paying out in full. It isn’t a discount and it isn’t a dispute; it’s an agreed amount, stated in the contract or the quote, released once the work has proved itself over a defects or liability period.

The number that matters most is the release date, not just the percentage. Retention with no stated release condition is money that’s easy to quietly write off as gone — put the release trigger, whether that’s a fixed date, practical completion, or the end of a stated defects period, on the quote and the invoice both, so it’s a term you can actually chase.

For example

You invoice a $12,000 job with 5% retention. The main contractor pays $11,400 up front and holds back $600, due 12 months after completion once the defects period has passed without a claim.

The mistake to avoid

Agreeing to a retention verbally with no stated release date — the job’s finished and forgotten, and six months later “when do I get the rest” has no clear answer to point to.

See also

Progress InvoicePart Payment

Where this shows up

Guide

Who is actually paying — when the client and the payer are not the same

A business sends you to the job but its accounts department pays. A landlord pays for work a tenant only agreed to. A main contractor books you as one trade of several, and their payment terms rule the job. Confirm the payer before you start, and the invoice practically writes itself once the work is done.

 Guide

Deposits and progress invoices for bigger jobs

How to split a bigger job into a deposit and progress invoices, so you’re never fronting weeks of unpaid work.

 Templates

Agreeing who pays, before the invoice finds out the hard way

Seven messages for confirming the payer before you start — a business’s accounts contact, a letting agent’s property reference, a main contractor’s terms, and the same question run the other way if you’re hiring another trade — fill in your details once at the top of this page and every script below rewrites itself.

Want this handled automatically?

BizBinder keeps quotes, invoices, deposits, and reminders in one binder, so using the right term is the least of it — the underlying habit runs itself.

A human reads every one. No newsletter, ever.

Filed

You are on the list.

A person reads every request. You will hear from us within one business day.

  1. 01 A person reads your note — not a queue.
  2. 02 You get an invite as spots open.
  3. 03 Your admin starts filing itself.

The free library is open while you wait. Nothing in it needs an account.

Open the free library →