How much of your money will retention lock up — and for how long?

Across the real subcontracts we've analysed, the median retention cap is 5% of the contract sum (n=35, August 2026), most commonly withheld as 10% of each progress claim until the cap is reached. Caps of 10% appear but sit above the market position.

The standard pattern releases half at practical completion and the remainder at the end of the defects liability period. The trap is the trigger: if release is tied to the head contract's completion or a defects period that restarts on rectification, your money can wait far longer than the period you priced.

It depends on the state and the project. NSW requires retention money for subcontractors to be held in trust on larger projects, and QLD and WA have statutory trust schemes phasing across project types. On projects outside those schemes, cash retention is usually just an unsecured debt owed to you - which is why the release drafting matters.

Often, yes - many contracts allow security by unconditional undertaking instead of cash deductions, and some let you swap after signature. A guarantee keeps the cash in your business but has its own costs and recourse risks; which is better depends on your facility and the contract's recourse wording.