Retention Billing Checklist
Retention holds back part of a payment until work is completed and defects are made good. This checklist helps you track and recover retention you are owed.
What this checklist covers
- Understand how retention is held and released
- Track retention amounts across a job accurately
- Bill for retention when it falls due
- Keep the records that support a release claim
- Avoid leaving retention unclaimed
6 min
Before you start
Retention is a percentage of each payment that the customer holds back as security that the work will be completed and any defects fixed. It is common in construction and larger project contracts. The amount held builds up across the job and is usually released in stages — often part at practical completion and the balance at the end of a defects-liability period. The risk is simple: retention you do not track is retention you can forget to claim.
Before you rely on this checklist, read your contract carefully, because retention percentages, caps and release timing are all set by the contract and can be affected by state security-of-payment rules. This is general guidance on tracking and billing retention, not legal advice — confirm your entitlements and the process for your contract and state.
Set up retention tracking
Get the mechanics right from the first invoice on the job:
- The retention percentage the contract specifies
- Any cap on the total retention that can be held
- The amount retained on each progress claim or invoice
- A running total of retention held to date
- The release triggers and dates the contract sets
A simple retention register per job — held this claim, held to date, due for release and when — keeps the money visible instead of lost in the totals.
Apply retention on each claim
As you bill the job, handle retention consistently:
- Calculate the retention to hold on each progress claim
- Show the retention deduction clearly on the claim
- Update the running total held
- Confirm you have not exceeded any retention cap
- Treat GST consistently with how the contract requires
- Keep the claim and its retention line on file
Showing the retention line on every claim means both sides agree the running balance as you go, not in a dispute at the end.
Claim the release when due
The whole point is to get the held money back. When a release falls due:
- Diarise each release date from the start of the job
- Raise a retention release claim or invoice when the trigger is met
- Reference the contract clause and the retention held
- Provide evidence — completion, defects rectified, certificates
- Follow up promptly if the release is not paid
Retention release is easy to overlook because it can fall due long after the work finished, so the diarised reminder is doing the heavy lifting here.
Common mistakes
Retention is lost in these predictable ways:
- Untracked retention — never building a running total per job
- Forgotten release — the defects period ends and no claim is raised
- Wrong percentage — holding or claiming the wrong amount
- No evidence — claiming release with nothing to support it
A retention register and diarised release dates fix most of these. This sits alongside progress and milestone billing on staged jobs. If retention or other staged payments are being held past their due date, a free debt appraisal can help you recover them. This is general information only, not legal advice.
Key takeaways
- Track retention held per job with a running total from the first claim.
- Show the retention deduction on each progress claim so the balance is agreed.
- Diarise every release date — retention can fall due long after the work ends.
- Support a release claim with completion and defects evidence.
Frequently asked questions
How much retention is usually held?
The percentage and any cap are set by the contract and vary by job and industry. Always read your specific contract rather than assuming a standard figure, and confirm the rules that apply in your state.
When is retention released?
Typically in stages tied to contract triggers, such as practical completion and the end of a defects-liability period. The exact timing is in your contract, so diarise each release date from the outset.
What if my retention release is not paid?
Raise the release claim with supporting evidence, reference the contract clause, and follow up. Security-of-payment rules in your state may give you a process to recover it. This is general guidance, not legal advice.
Work the checklist, then get paid
Use the free Invoice Generator, then let Merion recover anything that goes unpaid — commission-only.