Glossary

What is retainage in construction?

Retainage protects the party paying for the work. For AP it is a running balance that has to be right on every pay app and again when it is released.

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Published October 15, 2026 · Reviewed October 15, 2026

The short answer

Retainage, also called retention, is the part of each progress payment that the paying party holds back until the work, or a set milestone, is complete. Procore’s help center describes withholding 5–10% of a contract’s value as a common practice, but the rate and release terms come from your contract. On an AIA pay application, retainage is G702 line 5, figured from the G703 columns.

How is retainage calculated on a pay application?

On the AIA G702, line 5 holds retainage in two parts: a percentage of completed work (columns D and E on the G703) and a percentage of stored material (column F). Where the rate varies by line, the total comes from column I of the G703 instead. Line 6, total earned less retainage, is line 4 minus line 5.

Illustrative retainage at 10% of completed work, billing period 3
G702 line	Amount
4 · Total completed and stored to date	$77,800
5 · Retainage, 10% of completed work	$7,780
6 · Total earned less retainage	$70,020
7 · Less previous certificates for payment	$40,860
8 · Current payment due	$29,160

Illustrative amounts from the schedule of values example. They are not customer data.

The amounts continue the schedule of values example: $3,240 is withheld this period, on top of $4,540 withheld on earlier pay apps.

How does Procore handle retainage on subcontractor invoices?

Per Procore’s help center, as of October 2026, an invoice administrator sets retainage on a subcontractor invoice by selecting Schedule of Values lines and entering a Work Retainage this Period percentage, and Procore calculates the dollar amount. Its own example withholds $50.00 on a $500.00 line at 10%. Releasing retainage works the same way, with a Retainage Released percentage.

What should AP check on retainage?

The rate matches the subcontract, including any reduction the contract allows.
It applies to the right base: completed work, stored materials or both, as the contract says.
Retainage to date equals what was withheld on earlier pay apps plus this one.
Retainage, tax and the payable total reconcile with the source, with nothing counted twice.
A release is billed as its own amount when the contract’s terms are met, not netted into progress billing.

How do Denize and Invoice Check treat retainage?

When Procore returns retainage for a commitment, Denize for Procore shows it in review so you can confirm it before you submit. Denize does not invent a retainage amount.

Retainage is not one of Invoice Check’s published checks. Invoice Check compares invoice number, date, vendor, PO, totals, arithmetic, SOV billed amounts, billing period and duplicates with the vendor’s PDF, so review retainage in your normal approval.

Sources, as of October 2026

Facts about Procore and the AIA forms on this page come from these public pages, as of October 2026. Check them for changes before relying on a detail.

Procore: How do I set and release retainage on a subcontractor invoice in Procore?AIA Contract Documents: G702–1992 sample (PDF)AIA Contract Documents: G703–1992 sample (PDF)

Related terms and guides

What is a schedule of values?AIA G702 and G703, explained Pay application vs invoice Guide: commitment invoices and SOV allocation All glossary terms

Check retainage before you submit.

Bring a subcontractor invoice with retainage. We’ll show what Denize for Procore puts in front of your reviewer before anything reaches Procore.

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The short answer

How is retainage calculated on a pay application?

Illustrative retainage at 10% of completed work, billing period 3
G702 line	Amount
4 · Total completed and stored to date	$77,800
5 · Retainage, 10% of completed work	$7,780
6 · Total earned less retainage	$70,020
7 · Less previous certificates for payment	$40,860
8 · Current payment due	$29,160

Illustrative amounts from the schedule of values example. They are not customer data.

The amounts continue the schedule of values example: $3,240 is withheld this period, on top of $4,540 withheld on earlier pay apps.

How does Procore handle retainage on subcontractor invoices?

What should AP check on retainage?

The rate matches the subcontract, including any reduction the contract allows.

It applies to the right base: completed work, stored materials or both, as the contract says.

Retainage to date equals what was withheld on earlier pay apps plus this one.

Retainage, tax and the payable total reconcile with the source, with nothing counted twice.

A release is billed as its own amount when the contract’s terms are met, not netted into progress billing.

How do Denize and Invoice Check treat retainage?

When Procore returns retainage for a commitment, Denize for Procore shows it in review so you can confirm it before you submit. Denize does not invent a retainage amount.