Retention release calculator

Most UK construction contracts let the paying party keep back a slice of every payment as security against defects. Enter your contract's figures to see how much is held, when it should come back, and what the wait costs you.

• 815 of the 1,453 large companies that reported construction contracts in their latest period say those contracts include retention clauses.
• The most common standard rate they file is 5%. See every company and its rate.

How retention release usually works

The contract sets the rate, and the paying party deducts it from each interim payment. By the time the work reaches practical completion, the total held is that percentage of the value of the work.

Release normally comes in two parts. The first part, commonly half, is paid when the work reaches practical completion. The rest is held through the defects period, often 12 months, and paid once any defects notified in that period have been put right. Your contract may use different figures, a different trigger such as completion of the whole project, or a cap on the total held, so always work from its terms.

Each release is a payment under the contract. If the contract is a construction contract, the Construction Act gives you the same rights as for any other payment: a payment notice, a final date for payment, and the right to suspend work or go to adjudication if it is not paid. See Construction Act payment rules explained. If a release is paid late, you may be able to claim interest: try the late payment interest calculator.

Why it matters

Retention is the contractor's money, held by someone else. Specialist trades that finish early can wait a long time for the second half, because release is often tied to the end of the whole project. If the business holding it becomes insolvent, cash retention is usually lost, because it is not normally kept in a separate trust account. A retention bond is one way to avoid having cash held back at all.

What is changing

In its response to the Time to pay up consultation, the government said it will ban the deduction and withholding of retention payments under construction contracts, and consult on how. The ban is in the Commercial Payments Bill, which passed the House of Lords in October 2026 and is now before the House of Commons. It is not law yet and no start date has been set, so retentions in existing and new contracts still apply for now.

This calculator gives general information, not legal advice. It does not add VAT and assumes simple two part release. Take advice on a particular contract.