Retention and Stage Payments Calculator
Work out stage payments net of retention, how much is held back in total, and when each half of the retention is released.
💼 Are you a real estate agent or broker? Send this calculator to your buyers on your own branded listing page — every enquiry comes straight to your WhatsApp. Create free agent page →Retention is a percentage withheld from every payment to a contractor as security that the work will be completed and defects put right. Half is typically released at practical completion and the balance after the defects period, which is commonly six or twelve months.
It matters to both sides. For the client it is the only real leverage once the final payment is made; for the contractor it is working capital tied up long after the job has finished.
How retention works
Each stage payment is reduced by the retention percentage, so the contractor receives the stage value less that share. The withheld amounts accumulate, and a portion is released at practical completion with the balance at the end of the defects period.
Worked example
A 120,000 contract in five stages is 24,000 each. At 5% retention, 1,200 is held from every stage and 22,800 is paid, accumulating 6,000 in total. Half — 3,000 — is released at practical completion, and the remaining 3,000 after the twelve-month defects period.
Write down what triggers release
Disputes almost always concern whether practical completion has been achieved and whether defects have been remedied. Define both in the contract, agree a snagging list at completion, and diarise the end of the defects period — unclaimed retention is frequently simply forgotten.
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Create your free property pageFrequently asked questions
How much retention is normal?
Between three and five percent is common on domestic and small commercial contracts. Higher figures are resisted by contractors because the money is working capital tied up for a year or more after they have finished.
When should retention be released?
The first portion at practical completion, when the works are usable, and the balance at the end of the defects period once any snags have been remedied. Both trigger points should be defined in the contract.
Is retention my only protection?
No, and it is often not enough on its own. On larger projects a performance bond or parent company guarantee gives protection beyond a few percent, and clear stage definitions prevent overpayment in the first place.