Construction Retention Calculator
How much retention is held against certified work, and when each half falls due for release. In the UAE retention is typically 5% of certified value, often capped at 5% of the contract sum, released half at practical completion and half at the end of the defects liability period. The amount is the easy part; the dated release schedule is what most contractors cannot produce quickly, and unchased retention is the most commonly written-off receivable in the industry.
Step 1 of 3
The contract
Typically 5% in the UAE, occasionally 10% on smaller contracts.
Many contracts cap total retention. Above the cap, no further retention is deducted.
Step 2 of 3
Certified position
Certified value above the contract sum is normal — that is variations, not an error.
Step 3 of 3
Release dates
Actual or expected. A future date is a legitimate use — modelling a project not yet complete is the point.
Total retention held
AED 0
Enter your details to see the estimate.
| Breakdown | Amount |
|---|---|
| Certified to date | — |
| Retention rate | — |
| Retention deducted to date | — |
| Retention cap | — |
| Already released | — |
| Currently held | — |
Calculated in your browser. Your figures never reach our servers, and nothing you type here creates a record.
This is an estimate based on the figures you entered, provided for guidance only. It is not legal, tax or financial advice, and it does not account for the terms of an individual contract. Confirm your position with a qualified adviser or the relevant authority before acting on it.
The VAT treatment of retention depends on the tax point and the contract terms. The FAQ answer on that point is pending review before publication.
The concept
What retention is and why it exists
Retention is a percentage of each certified payment withheld by the client as security that the contractor will return to fix defects.
In the UAE it is typically 5% of certified value, often capped at 5% of the contract sum, and released in two halves: 50% at practical completion and 50% at the end of the defects liability period, usually twelve months later.
It applies in both directions. A main contractor holds retention from subcontractors on the same basis, so the same calculation runs on both sides of the ledger.
Show the working
The formulas
deducted = certified × retention %Capped at the contract cap.held = deducted − already releasedThe cap applies first, then releases are subtracted.first release = deducted × 50%At practical completion.final release date = practical completion + DLPCalendar months, not 30-day blocks.Worked example. A contract of AED 20,000,000 at 5% retention capped at 5%. Certified to date AED 12,000,000, so retention deducted is AED 600,000. Practical completion 1 June 2026 with a 12-month defects period. AED 300,000 falls due 1 June 2026 and the remaining AED 300,000 on 1 June 2027.
The question everyone gets wrong
Retention is not a receivable that collects itself
Retention sits on the balance sheet as an asset. Nobody sends an invoice for it, nobody is chasing it, and the person who negotiated the contract has usually moved to another project by the time it falls due.
Two failures follow.
It is netted rather than tracked separately. Held in receivables alongside trade debtors, retention becomes invisible. It should sit in its own ledger account with its own ageing.
Release dates are not diarised. The first half falls due at practical completion — an event that gets certified late, disputed, or simply not noticed. The final release depends on a defects period that ended a year ago and nobody flagged.
For a contractor running six live projects at 5% retention, the balance is routinely a seven-figure sum. It is real money, it has been earned, and it is the most commonly written-off receivable in the industry — not because clients refuse to pay, but because nobody asked.
Frequently asked questions
Retention questions
What is retention in construction?
A percentage of each certified payment withheld by the client as security that the contractor will return to fix defects. It is released in stages once the work is complete and the defects period has run.
How is retention calculated?
Multiply the value certified to date by the retention percentage, then apply the contract cap. On AED 12,000,000 certified at 5%, retention deducted is AED 600,000 — unless the contract caps total retention at a lower figure.
When is retention released in the UAE?
Typically half at practical completion and half at the end of the defects liability period, usually twelve months later. Both dates come from the contract, and both are commonly missed because nobody diarises them.
What is a defects liability period?
The window after practical completion during which the contractor must return to remedy defects, most often twelve months in the UAE. The final retention release falls due at its end.
Is retention capped?
Usually yes — many UAE contracts cap total retention at 5% of the contract sum. Once the cap is reached no further retention is deducted, which matters on any project past roughly half completion.
Does retention apply to subcontractors too?
Yes, on the same basis. A main contractor holds retention from subcontractors while the client holds it from them, so the same calculation runs on both sides of the ledger and both need tracking.
What happens if the client will not release retention?
Start with the contract: confirm the release trigger has been met, that defects have been closed out, and that the request has been made formally in writing. Most unreleased retention is not disputed, only unasked for.