What is retainage?
Retainage is defined as a contractually agreed upon dollar amount or percentage of a payment(s) to be withheld from periodic payments as security against the contractor’s performance over the life of the contract, or until the terms of the contracts are met. Payments are processed over the life of the contract and retainage accumulates according to terms of the agreement (i.e. amount or percentage). Depending upon the terms of the contract and phases of completion, departments may determine that the entire retained amount should be released, a portion should be released, or nothing should be released.
