Retainage: definition, example, and why it matters

Common in construction — usually 5–10% held by the GC or owner until final acceptance. Subcontractors invoice retainage separately at job close-out. State retainage laws vary widely.

• Short definition. A portion of a contract amount withheld until the project is complete.
• Category. Retainage is a invoicing term used by service businesses when billing customers.
• How Glo Invoice handles it. Glo Invoice builds retainage into the invoice itself, so you don't track it on paper or in a spreadsheet.

Frequently asked questions

What does retainage mean?

Common in construction — usually 5–10% held by the GC or owner until final acceptance. Subcontractors invoice retainage separately at job close-out. State retainage laws vary widely.

Related terms

• Invoice — A document a business sends a customer requesting payment for goods or services.
• Construction — Skilled trades that build, remodel, or repair structures.
• Mechanic's lien — A legal claim against a property by a contractor who hasn't been paid for work performed.