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Retainage · Ohio

Ohio retainage law: 4% public cap, 30-day release (2026)

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

On Ohio public improvements, labor must be paid at no less than 96% of approved estimates (Ohio Rev. Code § 153.12), a 4% retainage ceiling since September 30, 2025, and retained percentages are paid within 30 days of substantial completion, occupancy, use or acceptance (§ 153.13). On private work, § 4113.61 sets no cap and gives contractors 10 days to pass final retainage to subcontractors and suppliers.

Private work

Ohio · Private workVerified 2026-09-22
Retainage cap
No Ohio statute caps retainage on private construction; ORC 4113.61 expressly leaves the retainage percentage to 'any retainage provision contained in the contract, invoice, or purchase order'. It governs only the speed with which payments and retainage move down the chain, and does not apply to construction or improvement of single-, two-, or three-family detached dwelling houses.
Deadline
10 days
The contractor's receipt of final retainage from the owner. The ten-day deadline is for passing retainage down to subcontractors and material suppliers; it does not set when the owner releases retainage.
Statute
Ohio Rev. Code § 4113.61.
What the statute says
The contractor may reduce the amount paid by any retainage provision contained in the contract, invoice, or purchase order between the contractor and the subcontractor or material supplier, and may withhold amounts that may be necessary to resolve disputed liens or claims ...
Ohio Rev. Code § 4113.61. · Archived copy of the official text, captured 2026-07-13

Public work

Ohio · Public workVerified 2026-09-22
Retainage cap
4%
Since House Bill 96 took effect on September 30, 2025, partial payments for labor under a unit or lump sum price public improvement contract must be made 'at a rate of not less than ninety-six per cent' of the approved estimates: a maximum 4% retainage on labor, with no 50%-completion step. Stored materials are paid at 92% of invoice cost under ORC 153.14, with the balance paid when the material is incorporated into the work. No subcontract may be paid at a rate lower than the rate the public authority pays the contractor. The 96% floor is in ORC § 153.12; the 30-day release is in § 153.13 as in effect from September 30, 2025.
Deadline
30 days
Substantial completion, occupation, use, or acceptance of the major portion of the project (with no other reason to withhold retainage); the balance follows final completion.
Statute
Ohio Rev. Code § 153.12 (partial payments at not less than 96%, the source of the 4% cap) and § 153.13 (retained percentages released within 30 days of substantial completion); see also §§ 153.14, 153.63.
What the statute says
Partial payments to the contractor for labor performed under either a unit or lump sum price contract shall be made at a rate of not less than ninety-six per cent of the estimates prepared by the contractor and approved by the architect or engineer. No subcontract shall be paid at a rate lower than the rate being paid to the contractor by the public authority.
Ohio Rev. Code § 153.12 (partial payments at not less than 96%, the source of the 4% cap) and § 153.13 (retained percentages released within 30 days of substantial completion); see also §§ 153.14, 153.63. · Archived copy of the official text, captured 2026-03-16

Who this applies to

Ohio treats public and private work differently, and the difference decides who owes what to whom.

What the rule says

On a public improvement, partial payments for labor under a unit or lump sum price contract must be at least 96% of the estimates the contractor prepares and the architect or engineer approves, which leaves no more than 4% retained on labor, with no step at 50% completion [6]. When the major portion of the project is substantially completed and occupied, in use or otherwise accepted, and no other reason exists to withhold retainage, the retained percentages for that portion, with the interest accrued on them, go to the primary contractor within 30 days [7]. On private work, § 4113.61 sets no ceiling and no owner deadline; its retainage deadline, 10 calendar days, governs the contractor's payment of final retainage to subcontractors and material suppliers [5].

How to comply

Public improvement contracts

  1. Check each partial payment for labor against the 96% floor [6]. Stored materials are paid at 92% of invoice cost, with the balance paid once the material is incorporated into the work [3].
  2. Pay each subcontract at no lower rate than the public authority pays you [6].
  3. Count 30 days from substantial completion, occupation, use or acceptance of the major portion of the project [7]. From then on, only the amount reasonably necessary to assure final completion may be held, and that balance is due within 30 days after final completion [7].
  4. Know the interest rules. Payment on approved estimates is due within 30 days; if it is late, or retainage is withheld without authority, the contractor is allowed interest at the average prime rate established at commercial banks in the nearest city of over 100,000 population [3]. If money due is neither paid nor deposited in escrow, the governmental entity owes 8% annual interest, compounded daily [4].

Private contracts

Section 4113.61 does not set a date for the owner's release to the contractor [5]; for that date, look to the contract.

What changed recently

House Bill 96 of the 136th General Assembly brought public-improvement retainage on labor down to a maximum of 4%, effective September 30, 2025 [6]. The current texts of the release section, § 153.13 [7], the stored-materials and interest section, § 153.14 [3], and the escrow section, § 153.63 [4], took effect the same day under the same bill. The private pass-down rule in § 4113.61 has been in effect since September 29, 2011, under House Bill 153 of the 129th General Assembly [5].

Related

Run the numbers for Ohio

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. Ohio Rev. Code § 153.12, Awarding and executing contract, effective September 30, 2025 (Ohio Laws, codes.ohio.gov) (archived copy, captured 2026-03-16)
  2. Ohio Rev. Code § 153.13, authenticated PDF, effective September 30, 2025 (Ohio Legislative Service Commission) (archived copy, captured 2025-11-14)
  3. Ohio Rev. Code § 153.14, authenticated PDF, effective September 30, 2025 (Ohio Legislative Service Commission) (archived copy, captured 2025-11-14)
  4. Ohio Rev. Code § 153.63, Escrow account, effective September 30, 2025 (Ohio Laws) (archived copy, captured 2026-03-15)
  5. Ohio Rev. Code § 4113.61, effective September 29, 2011 (Ohio Laws) (archived copy, captured 2026-07-13)
  6. Ohio Rev. Code § 153.12 (partial payments; 96% floor), Ohio Laws and Administrative Rules (archived copy, captured 2026-03-16)
  7. Ohio Rev. Code § 153.13 (release of retained percentages), authenticated PDF effective 2025-09-30, Ohio Laws and Administrative Rules (archived copy, captured 2025-11-14)

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.