Retainage vs retention
2026-09-04 · 4 min read
In American construction these are two words for the same money: the percentage withheld from each progress payment until closeout. The difference is register and region, not substance — but the clauses that carry the words are not always identical.
| Best overall | They are the same thing | Read the clause, not the word. |
| Best free check | The retainage calculator | Whatever it is called, the arithmetic is identical. |
| Best for retainage tracking | A stated release date in the subcontract | The clause beats the vocabulary. |
Feature matrix
Our pick: neither — the word is not the variable
| Feature | Retainage | Retention |
|---|---|---|
| Money withheld | Yes | Yes |
| Typical rate | 5-10% | 5-10% |
| Applied to | Completed and stored | Completed and stored |
| Released at | Closeout | Closeout |
| Common usage | US statutes and AIA forms | UK, and some US contracts |
| Statutory reserve (TX) | 10% | 10% |
| Federal release rule | 30 days after acceptance | 30 days after acceptance |
Where the vocabulary comes from
“Retainage” is the term American statutes and the standard AIA payment forms use. “Retention” is the term used in UK contracts and by plenty of American parties who learned the practice elsewhere. Texas's statute frames it as funds the owner must reserve, which is a third word for the same money.
Because the words are interchangeable in practice, a subcontract that uses both is not necessarily inconsistent — but it is worth a question, because a clause that separates “retainage” from “retention” is doing something unusual and should be read carefully.
What actually varies
The rate, the base, the release trigger and the release date. Texas requires the owner to reserve 10 percent of the contract price during the work and for 30 days after completion, and a claimant reaches those reserved funds by filing an affidavit no later than the 30th day after completion. On federal contracts retained amounts must be released by the date the contract names or, absent one, by the 30th day after final acceptance.
None of those turn on which word the contract uses. Work your own figure on the retainage calculator and negotiate the release date, not the terminology.
Buying checklist
- What is the rate, and does it reduce after 50 percent completion?
- Is it applied to completed-and-stored, or to the contract sum?
- What triggers release — your scope, or the whole project?
- Is there a date, or only “after final acceptance”?
- Does your state allow a retainage bond instead of cash?
Sources
- Tex. Prop. Code § 53.101
Texas requires the owner to reserve 10 percent of the contract price (or 10 percent of the value of the work) during the job and for 30 days after completion — statutory retainage.
Read 2026-09-04
- Tex. Prop. Code § 53.103
A Texas claimant reaches the reserved funds by sending the required notices and filing a lien affidavit no later than the 30th day after the work is completed, the contract terminated, or performance abandoned.
Read 2026-09-04
- 31 U.S.C. § 3903(a)(6)
Retained amounts on a federal contract must be released by the date the contract specifies or, if it specifies none, by the 30th day after final acceptance.
Read 2026-09-04