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Retainage · Nebraska

Nebraska retainage law: 10% cap, 45-day release (2026)

By Sami Chicha, EditorUpdated Checked against primary sources · not yet reviewed by a licensed professionalFact-checked
Quick answer

Nebraska's Construction Prompt Pay Act caps retainage at the contract's figure, up to 10% (§ 45-1204). Once a contractor's or subcontractor's scope is 50% complete and it has performed and gives assurances, at most 5% of later progress payments may be held. The owner releases retainage for work done per the contract within 45 days after substantial completion (§ 45-1203). State of Nebraska contracts are excluded.

Private work

Nebraska · Private workVerified 2026-09-22
Retainage cap
10%
Retainage may not exceed the amount stated in the contract and in no case a rate of 10%. The cap and the step-down at 50% completion are in Neb. Rev. Stat. § 45-1204; the 45-day release and the 10-day pass-down to subcontractors are in the companion § 45-1203.
Deadline
45 days
Substantial completion of the project or a designated portion of it. Separately, once the withheld party's scope of work is 50% complete and it has performed in accordance with the contract, no more than 5% of any additional progress payment may be withheld if it gives satisfactory and reasonable assurances of continued performance and financial responsibility.
Statute
Neb. Rev. Stat. § 45-1204 (cap) and § 45-1203 (release), Nebraska Construction Prompt Pay Act.
What the statute says
For retainage, in an amount not to exceed the amount specified in the applicable contract, which shall not exceed a rate of ten percent. If the scope of work for the contractor or subcontractor from which retainage is withheld is fifty percent complete ... no more than five percent of any additional progress payment may be withheld as retainage ...
Neb. Rev. Stat. § 45-1204 (cap) and § 45-1203 (release), Nebraska Construction Prompt Pay Act. · Archived copy of the official text, captured 2025-11-15

Public work

Nebraska · Public workVerified 2026-09-22
Retainage cap
10%
Retainage may not exceed the amount stated in the contract and in no case a rate of 10%. The Act reaches political subdivisions but expressly excludes contracts for the State of Nebraska and federal-aid or state-aid projects of a political subdivision on which the state pays the contractor, so State of Nebraska contracts are outside it. The cap and the step-down at 50% completion are in Neb. Rev. Stat. § 45-1204; the 45-day release and the 10-day pass-down to subcontractors are in the companion § 45-1203.
Deadline
45 days
Substantial completion of the project or a designated portion of it. Separately, once the withheld party's scope of work is 50% complete and it has performed in accordance with the contract, no more than 5% of any additional progress payment may be withheld if it gives satisfactory and reasonable assurances of continued performance and financial responsibility.
Statute
Neb. Rev. Stat. § 45-1204 (cap) and § 45-1203 (release), Nebraska Construction Prompt Pay Act.
What the statute says
For retainage, in an amount not to exceed the amount specified in the applicable contract, which shall not exceed a rate of ten percent. If the scope of work for the contractor or subcontractor from which retainage is withheld is fifty percent complete ... no more than five percent of any additional progress payment may be withheld as retainage ...
Neb. Rev. Stat. § 45-1204 (cap) and § 45-1203 (release), Nebraska Construction Prompt Pay Act. · Archived copy of the official text, captured 2025-11-15

Who this applies to

A single statute, the Nebraska Construction Prompt Pay Act, governs retainage on private jobs and on local public work, and its figures are the same for both [4].

Its limits protect the tiers below the owner as well. The percentage rules are written about retainage withheld from a contractor or a subcontractor [4], and once a contractor receives retainage, its subcontractors are due their share within 10 days of that receipt [5].

On the public side, the Act reaches counties, cities and other political subdivisions [3]. Two kinds of public work are outside it [3]:

Those contracts fall outside this page; their retainage terms are a question for the contract itself, read with a lawyer.

What the rule says

The cap works in two stages, and release is tied to one event. Retainage may not exceed the amount the contract specifies, and in no case a rate of 10% [4]. When the withheld party's scope of work is 50% complete and it has performed in accordance with the contract, no more than 5% of each further progress payment may be held, provided that party gives satisfactory and reasonable assurances of continued performance and financial responsibility [4]. All retainage for work completed in accordance with the contract must then be released and paid within 45 days after the project, or a designated portion of it, is substantially complete [5].

How to comply

Both sections are linked under Sources; compare their wording with your contract and any subcontract before relying on these figures.

What changed recently

The session laws listed for these provisions are Laws 2010, LB552, § 4, and Laws 2014, LB961, § 7 [4].

Related

Run the numbers for Nebraska

How retainage is held on each payment and when it comes back: Retainage in construction. Bill it on the pay application template, which carries retainage on work and on stored materials.

Retainage laws: other states

Sources

  1. Neb. Rev. Stat. 45-1204, Withholdings; authorized (Nebraska Legislature official page) (archived copy, captured 2025-11-15)
  2. Neb. Rev. Stat. 45-1203 (official page) (archived copy, captured 2026-01-17)
  3. Neb. Rev. Stat. 45-1202, Terms, defined (official page) (archived copy, captured 2026-01-23)
  4. Neb. Rev. Stat. § 45-1204 (retainage cap; 50% step-down), Nebraska Legislature (archived copy, captured 2025-11-15)
  5. Neb. Rev. Stat. § 45-1203 (release of retainage; 45 days), Nebraska Legislature (archived copy, captured 2026-01-17)

Changelog

  1. : 1 more jurisdiction verified and published, 47 of 51 in all.
  2. : California private work corrected: Civ. Code § 8811 (SB 61) caps retention at 5% for contracts entered into on or after January 1, 2026; the row had said no cap.
  3. : Missouri private work corrected: Mo. Rev. Stat. §§ 436.300 to 436.336 cap private retainage at 10% and require release within 30 days of substantial completion; the row had said no private retainage rule.
  4. : Tennessee corrected: Tenn. Code Ann. § 66-34-203 caps owner-to-prime retainage at 5% of the contract, on public and private work; escrow applies to prime contracts of $500,000 or more, and the $300-a-day damages do not apply to public owners.
  5. : Idaho private work added: Idaho Code § 29-115 caps private retention at 5% and requires release within 35 days of final completion; the row had left private work out.
  6. : Rhode Island corrected: the 5% cap in R.I. Gen. Laws § 37-12-10.1 also covers private lienable work of $250,000 or more, and a retainage application may be submitted only 60 days after substantial completion unless the contract allows earlier.
  7. : Oklahoma public work corrected: since November 1, 2022, 61 O.S. §§ 113.1 and 226 reduce retainage to 2.5% of the amount earned to date after 50% completion with satisfactory progress, with no bond condition.
  8. : Montana public work corrected: state and local public contracts are capped at 5% under Mont. Code Ann. § 18-2-316, and final payment on building contracts is due within 30 days of final acceptance (§ 18-2-306).
  9. : Delaware public work corrected: 29 Del. C. § 6516(f)(3) requires retainage to be paid within 60 days after completion or notice of completion, with interest available from the 61st day; the row had no release deadline.
  10. : District of Columbia corrected: D.C. Code § 2-203.01 requires a 10% retent on District construction contracts until completion and acceptance, and the Private Contractor and Subcontractor Prompt Payment Act counts retainage as an undisputed amount due on its schedule; both rows had said no statute.
  11. : Colorado private work updated: HB26-1311 lets a contractor or subcontractor tender a retainage bond of up to 5% in lieu of retainage on contracts from August 12, 2026, and the owner must accept a compliant bond.
  12. : Kentucky private work updated: 2025 Ky. Acts ch. 156 raised the KRS 371.160 escrow threshold to $2,000,000 and barred waiving it by contract.
  13. : 10 more jurisdictions verified and published, 46 of 51 in all.
  14. : Page published.
  15. : Dataset first published with 36 of 51 jurisdictions verified.