Retainage
A percentage of each progress payment withheld by the owner or GC until project completion.
Retainage (also called retention) is the practice of withholding a portion of each progress payment — typically 5-10% — as security to ensure the contractor or subcontractor completes all work satisfactorily.
Retainage is released after substantial completion and final punch list items are resolved. Proper tracking of retainage is essential for accurate pay application auditing, as cumulative retainage must be verified against each G703 line item.