Add, Modify, and Release Payment Retainage

Owned by Melissa Girtz
Last updated: Aug 10, 2023 by Gabrielle Fuchs
3 min read

Retainage is the amount of money that is retained from each contractor payment. This can be customized by the amount of retainage, by pay request, or set for the entire contract. Money can also be retained based upon a percent of the payment or a set dollar value. Releasing retainage can stop retainage values previously set and release those payments for the most current payment. At the end of the project, all retainage is typically released.

Retainage for the first payment is automatically added but can be modified. To add, modify, or release retainage:

To Add Retainage:

  1. Navigate to the contract menu, then select ‘Payments’.

  2. Click on the ‘Add’ button next to the Active Retainage section to add a new entry. Please note, that retainage will be automatically added when your first payment is created.

  3. Enter either the percent using integers (ie 5, 10, etc…) or the positive dollar value you wish to retain.

    1. There can be more than one active retainage entry for payments if necessary.

  4. Click ‘Save’.

  5. Note the amount of retainage withheld is reduced by the appropriate amount under the current payment number in the Payments section.

To Increase or Reduce Retainage:

If you are modifying retainage to release retainage, please instead see the instructions to release retainage, below.

  1. Navigate to the contract menu, then select ‘Payments’.

  2. Make sure that the payment number that the active retainage is being modified or reduced on is created and is ‘open’ or unlocked.

    1. Meaning it does not have the ‘Completed Date’ and ‘Completed By’ filled out. If it is completed or locked, remove or clear the ‘Completed Date’ and ‘Completed By’ fields.

  3. Click on ‘Add’ to add a new retainage entry with the new percent (see the above instructions for more information on adding retainage). Select the payment that the new rate should start on under ‘Added Payment’.

  4. Click ‘Save’ to update and save these changes.

  5. Click on the ‘Edit’ button next to the Active Retainage rate that needs to stop or end.

  6. Select the same payment number that was used in Step 2 under the ‘Released Payment’ field to end the prior retainage percent/amount.

  7. Click on ‘Save’ to update the changes. This entry will no longer show under Active Retainage because it has been released.

  8. Note the amount of retainage withheld is reduced by the appropriate amount under the current payment number in the Payments section.

To Release Retainage:

When you select the ‘final’ payment, all retainage will be automatically released so you will not need to manually release retainage for final payments

To manually release retainage, if not a final payment:

  1. Navigate to the contract menu, then select ‘Payments’.

  2. Make sure that the payment number that the active retainage is being released on is ‘open’ or unlocked.

    1. Meaning it does not have the ‘Completed Date’ and ‘Completed By’ filled out. If it is completed or locked, remove or clear the ‘Completed Date’ and ‘Completed By’ fields.

  3. Click on the ‘Edit’ button next to the Active Retainage.

  4. Enter the most current payment number in the ‘Released Payment’ field, then click on Save. This entry will no longer show under Active Retainage because all retainage has been released.

  5. Navigate back to the ‘Payments’ section to verify that the retainage shows the correct amount for the payment on which the retainage was released.