Mastering Retention Payments and Liens for Tradies
7 October 2026 · 6 min read · By Heaney Accounting
For many commercial builders and sparkies, retention money is a standard part of the contract. However, if not tracked correctly, these withheld funds can create a serious gap in your cash flow.
Understanding Retention Cycles
Retention is typically a percentage of your invoice held by the head contractor as a security deposit for defects. This usually lasts until the defects liability period ends, which can be months after the job is finished.
- Always clearly state the retention percentage on your initial quote and invoice.
- Set a calendar reminder for when the defect liability period expires.
- Use a dedicated spreadsheet to log which invoices have pending retentions.
- Follow up in writing immediately after the release date passes.
Pro Tip: If you don't chase your retention, it effectively becomes an interest-free loan to the head contractor. Don't let your hard-earned profit sit in someone else's bank account.
Knowing your rights regarding security of payment legislation is vital. If a builder refuses to pay, you may be eligible to lodge a payment claim to force payment.
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