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Retainage · South Carolina

South Carolina retainage law: 3.5% cap on state public work (2026)

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

On South Carolina state public work, contracts and subcontracts may retain no more than 3.5% of each progress payment (S.C. Code Ann. § 11-35-3030(4)). Once a division is certified complete, its retainage goes to the prime forthwith, and the prime pays the subcontractor within 10 days of receipt. Private commercial jobs may withhold a reasonable amount for retainage (§ 29-6-40), with no percentage or deadline.

Private work

South Carolina · Private workVerified 2026-09-22
Retainage cap
No statutory percentage cap on private work. The prompt-payment chapter (Title 29, ch. 6, art. 1) applies to commercial private projects and expressly permits withholding 'a reasonable amount for retainage,' but sets no number and no release deadline. Sec. 29-6-60 excludes residential homebuilders, residential improvements of 16 or fewer units, and owner-financed private improvements.
Deadline
Not in our verified record
Statute
S.C. Code Ann. Sec. 29-6-40 (with Sec. 29-6-30, Sec. 29-6-50, Sec. 29-6-60).
What the statute says
Nothing in this chapter prevents the owner, the contractor, or a subcontractor from withholding application and certification for payment because of the following: unsatisfactory job progress, defective construction not remedied, disputed work, ... or a reasonable amount for retainage.
S.C. Code Ann. Sec. 29-6-40 (with Sec. 29-6-30, Sec. 29-6-50, Sec. 29-6-60). · Official text · retrieved 2026-09-22

Public work

South Carolina · Public workVerified 2026-09-22
Retainage cap
3.5%
Maximum 3.5% of each progress payment, and the same cap applies down the chain to subcontracts. This is the Consolidated Procurement Code, which governs state governmental bodies; local political subdivisions are generally outside Title 11 ch. 35.
Deadline
10 days
Certification that a division of the contract (each separate contractor's or subcontractor's scope on a multi-prime / multi-sub project) is complete; the allocable retainage must then be released 'forthwith' to the prime, who has 10 days to pass it to the subcontractor.
Statute
S.C. Code Ann. Sec. 11-35-3030(4).
What the statute says
In a contract or subcontract for construction which provides for progress payments in installments based upon an estimated percentage of completion, with a percentage of the contract's proceeds to be retained by the State or general contractor pending completion of the contract or subcontract, the retained amount of each progress payment or installment must be no more than three and one-half percent.
S.C. Code Ann. Sec. 11-35-3030(4). · Official text · retrieved 2026-09-22

Who this applies to

South Carolina deals with retainage in two separate parts of its code, and the kind of owner decides which one matters.

State public construction. Title 11, chapter 35 [1] is the Consolidated Procurement Code, the law that governs state governmental bodies. Its retainage limit is written for a construction contract and a construction subcontract alike, so the 3.5% [1] ceiling binds the State when it holds money back from a prime contractor and binds that prime when it holds money back from a subcontractor. Local political subdivisions are, for the most part, outside chapter 35 [1].

Private commercial projects. Article 1 of Title 29, chapter 6 [2], the chapter on payments to contractors, subcontractors and suppliers, covers commercial private work. Section 29-6-60 takes three categories out of the chapter altogether: residential homebuilders, residential improvements of 16 or fewer units, and owner-financed private improvements [2].

What the rule says

On state work, the ceiling is measured one installment at a time rather than against the contract total. Where a contract or subcontract pays in installments based on an estimated percentage of completion and keeps part of each payment until the job is done, the amount kept from any single installment may be no more than 3.5% [1]. Release follows the job's divisions. On a project shared among several separate contractors or subcontractors, each one's scope counts as a division; once a division is certified as complete, the retainage allocable to it goes to the prime contractor forthwith. From the day it receives that money, the prime has 10 days [1] to hand the full retention it withheld to the subcontractor responsible for the completed work.

Private commercial work gets permission instead of a limit. The chapter confirms that an owner, a contractor or a subcontractor may hold back a payment for listed reasons, among them unsatisfactory job progress, defective construction not remedied and disputed work, and "a reasonable amount for retainage" is one entry on that list [2]. No percentage and no release date come with it.

How to comply

On a state public contract:

On a private commercial job, the contract supplies the percentage, which the chapter's wording frames as a reasonable amount, and the release timing, for which the chapter sets no deadline. The chapter does put a price on late payment, though the rule is not specific to retainage: interest of 1% per month [2] from the due date, provided the payer was notified of the interest provision when payment was requested. Parties to a private project can contract out of the chapter's payment periods in § 29-6-30 and its interest rate in § 29-6-50 only by waiving those sections by number, in conspicuous bold or underlined type [2].

What changed recently

The 3.5% ceiling is in § 11-35-3030, and that section's history opens with 1981 Act No. 148 [1]. It was later amended by 2014 Act No. 264, effective June 6, 2014 [1], and by Section 43 of 2019 Act No. 41 (S.530), effective May 13, 2019, for solicitations issued after that date [1]. Chapter 6 of Title 29 was enacted by 1990 Act No. 426, and 2000 Act No. 295 added its Article 3 [2].

Related

Run the numbers for South Carolina

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. S.C. Code of Laws Title 11, Chapter 35 (Consolidated Procurement Code), Sec. 11-35-3030 (retrieved 2026-09-22)
  2. S.C. Code of Laws Title 29, Chapter 6 (Payments to Contractors, Subcontractors, and Suppliers) (retrieved 2026-09-22)

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.