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Ten percent of a 250,000 billing
The progress billing is 250,000. The contract uses a 10 percent hold, which is the federal maximum in FAR 52.232-5. You expect the release in 6 months. A 5 percent contract needs a 5 in the percent box.
Amount subject to retainage: 25% lower
Change amount subject to retainage to 187,500 while keeping the other example values the same.
Amount subject to retainage: 25% higher
Change amount subject to retainage to 312,500 while keeping the other example values the same.
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Quick answer
What does the Retainage cash delay calculate?
How much cash does retainage hold back? This calculator uses amount subject to retainage, retainage, and months until release to estimate cash held until the job is released immediately in your browser.
With the values currently entered, the result is $25,000.00 — held until release. It also shows paid on this billing, retainage rate, and months until release.
How to use the Retainage cash delay
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Amount subject to retainage
- Retainage — entered in %
- Months until release — entered in months
Retainage cash delay formula
Cash held = amount × retainage percent. Cash paid now = amount − cash held.
Assumptions
- FAR 52.232-5 lets a contracting officer retain a maximum of 10 percent of a progress payment when satisfactory progress has not been made. FAR 32.103 says the hold is decided case by case, and retained amounts are paid promptly once the contract requirements are complete. The 10 in the box is that federal maximum. Type the percent your contract uses.
- Held cash is the amount you type times that percent. The months box tells you how long this plan keeps the cash. The page does not add interest for the delay.
Verify the inputs
Authoritative sources
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Practical guide
Retainage cash delay example and edge cases
Retainage is cash a contract holds back from a billing. FAR 52.232-5 allows a contracting officer to retain up to 10 percent of a progress payment when satisfactory progress has not been made. FAR 32.103 says that hold is case by case, and the retained amount is paid once the contract requirements are complete.
Example: Ten percent of a 250,000 billing
The progress billing is 250,000. The contract uses a 10 percent hold, which is the federal maximum in FAR 52.232-5. You expect the release in 6 months. A 5 percent contract needs a 5 in the percent box.
- Amount subject to retainage
- 250,000
- Retainage
- 10 %
- Months until release
- 6 months
Calculated result$25,000.00held until release
The hold is 25,000. The billing pays 225,000 now. The 25,000 stays out for 6 months in this plan. The page does not add interest for those months.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the cash held first. Ten percent of 250,000 is 25,000, so 225,000 is paid on this billing. The 6 months is the delay you typed, and it does not change the dollars.
- FAR 32.103 caps a federal hold at 10 percent and tells the contracting officer to decide each hold on its own. A private contract can use a different percent. Type the percent the contract actually writes down.
Edge cases worth checking
The contract holds 5 percent
The 10 in the box is the FAR maximum, and it applies when progress is unsatisfactory. Change it to 5 when that is the percent in your contract. Five percent of 250,000 holds 12,500.
Bond premiums are inside the billing
FAR 52.232-5 says the retainage paragraph does not apply to the part of a progress payment that reimburses bond premiums. Pull that premium out of the amount before you apply the percent.
What changes the result most
Amount subject to retainage
Use a current amount for amount subject to retainage. Include fees or recurring costs that belong in the same figure.
Retainage
Test a lower and higher retainage. A small percentage change can move the final result more than expected.
Months until release
Keep months until release on the same time basis as the other inputs. Monthly and annual values are easy to mix up.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Amount subject to retainage: 25% lower
187,500$18,750.00held until release
Amount subject to retainage: 25% higher
312,500$31,250.00held until release
Retainage: 25% higher
13 %$32,500.00held until release
Common mistakes
Check amount subject to retainage
FAR 52.232-5 lets a contracting officer retain a maximum of 10 percent of a progress payment when satisfactory progress has not been made. FAR 32.103 says the hold is decided case by case, and retained amounts are paid promptly once the contract requirements are complete. The 10 in the box is that federal maximum. Type the percent your contract uses. Make sure this matches the number you enter.
Keep months until release consistent
Held cash is the amount you type times that percent. The months box tells you how long this plan keeps the cash. The page does not add interest for the delay. Use the same units and time period throughout the calculation.
Do not rely on one retainage cash delay scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
How much cash does retainage hold back?
It does not replace a quote, contract, accountant, or local employment guidance.