Retention Release Timing Calculator

Retention release schedules affect contractor cash flow significantly.

Retention total

First release %

Months between releases

Discount rate %

NPV of releases

$487,857

First release

$250,000

Second release

$250,000

How the math works

First release at completion. Second release discounted N months. NPV = first + discounted second.

$500k × 50% = $250k first + $250k / (1.0083^6) = $238k NPV = $488k total NPV.

How to Use

Enter retention total.
Enter release % at substantial completion.
Enter release % at punch list completion.
Enter months between completions.
Enter discount rate %.
Read NPV of release schedule.

Frequently Asked Questions

Retention norms?

10% of each progress payment standard. Reduced to 5% after 50% complete (in some contracts). Released per schedule: 50% at substantial completion, 50% at punch list signoff. Some contracts reduce retention to 5% for proven performers.

NPV impact?

$500k retention held 6 months at 10% discount = $500k × (1 − 1/1.05) ≈ $24k NPV cost. Contractors price this into bids — high-retention contracts cost 2-4% more. Reduced retention for creditworthy contractors makes economic sense.

Alternatives?

Performance bond (fee 1-2% of contract) in lieu of retention. Letter of credit (fee 1% annual). Retention bond. Each reduces contractor working capital burden but adds soft cost. Choose based on contractor creditworthiness.