How much retainage is normal on an AIA job?

Most contracts hold 5% to 10% of each payment until substantial completion. The exact percent and release terms are in your contract.

Where does retainage go on the G702 and G703?

You apply retainage in Column I of the G703 for each line, then total it on Line 8 of the G702.

Is retainage charged on stored materials?

Usually yes. Stored materials are typically subject to the same retainage percent as completed work, unless your contract says otherwise.

When is retainage released?

Usually at or near substantial completion, after punch-list items are done and required lien waivers are submitted.

How to Bill Retainage on AIA G702 and G703 Forms

Retainage is the slice of each payment the owner holds back until the job is done. On AIA forms, you apply it line by line on the G703 and total it on Line 8 of the G702. It usually runs 5% to 10% of completed and stored work.

What is retainage in construction billing?

Retainage affects both contractors and owners on most jobs. The owner holds back a small percent of each payment until the work is substantially complete. That held money pushes the contractor to finish strong and protects the owner from unfinished or poor work.

For contractors, retainage can tie up cash for months, so tracking matters. It usually sits at 5% to 10% of each progress payment, but the exact percent is in your contract. For the basics, see our guide to retainage in construction billing.

What are the AIA G702 and G703 forms?

The AIA G702 (Application and Certificate for Payment) and G703 (Continuation Sheet) are the standard forms for construction billing. Learn the G702 and G703 form basics if they are new to you.

What does the G702 cover?

The G702 is the cover sheet for each payment application. It sums up the project money:

Line 5: Completed work (from the G703)
Line 6: Stored materials
Line 7: Total completed and stored
Line 8: Retainage (a percent of completed and stored work)

It needs signatures from the contractor and the architect or project manager. They certify the work and payment details are correct.

What does the G703 track?

The G703 holds the schedule of values. Each line is a part of the contract:

Column G: Work completed this period
Column H: Total completed and stored to date
Column I: Retainage applied to each line item

Using AIA billing software fills these forms correctly each cycle and does the retainage math for you.

How do you bill retainage on AIA forms?

Step 1: Find your retainage percent

Check the percent in your contract. Most call for 5% or 10%. It applies to both work completed and materials stored.

Step 2: Enter retainage on the G703

For each line on your schedule of values:

Update work completed and stored (Columns G and H)
Apply the retainage percent to the total completed and stored to date (Column I)
Example: $20,000 of completed work at 10% retainage = $2,000 in Column I

Step 3: Summarize retainage on the G702

Line 8 on the G702 should match the sum of all Column I values from the G703.

Step 4: Double-check the math

Mistakes lead to payment delays or rejection. Software calculates retainage for every line and auto-fills the totals.

Step 5: Submit and track

Send the forms to the architect or owner for approval. With progress billing software, you can track which retainage amounts are still held and when they are due for release.

What retainage mistakes should you avoid?

Miscalculating the percent

Some contracts change retainage rates partway through, or apply a different rate to stored materials. Check your contract before each billing cycle.

Wrong line entries on the SOV

Make sure retainage sits in Column I of the G703 for each line, and the sum matches Line 8 of the G702. Keep work, materials, and change orders correct.

Forgetting change orders

Change orders change the total retainage. Always add new change order lines to the G703 and redo the retainage totals.

How does Werx simplify AIA retainage billing?

Automatic retainage math

Set the retainage percent once and Werx handles the rest. Each line on your schedule of values updates on its own, so no missed entries or math errors.

Built-in progress billing

Change orders fold in for you. Track held funds and their release on simple dashboards. Get alerts when retainage is due for release.

Error checks before you submit

Built-in checks catch wrong percentages and missing data before you send. That means less back-and-forth and faster approvals.

When should you automate retainage billing?

Track retainage by hand only if you run one or two simple jobs. A short schedule of values is easy to total in a spreadsheet.

Automate once you carry retainage across several jobs and billing cycles. Held funds add up fast, and one missed line can cost you thousands at release. Stored materials add another layer, so read how to bill stored materials on AIA pay apps too.

Key takeaways

Retainage (usually 5% to 10%) is held from each payment until project completion.
The G702 summarizes the money; the G703 details each line's retainage in Column I.
Line 8 of the G702 must match the sum of Column I on the G703.
Always check your contract percent and update for change orders.
For the wider picture, see how to master retainage payments across all your jobs.

AIA Retainage Billing on G702/G703: A Complete Guide

What is retainage in construction billing?