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Retainage · Washington

Washington retainage law: 5% public cap, 60-day release (2026)

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

On Washington public improvement contracts, the public body may reserve no more than 5% of the moneys the contractor earns, held in trust for claims and state taxes, and must release and pay it in full 60 days after completion of all contract work (RCW 60.28.011). A surety bond may replace retainage, and a contractor may withhold no more than 5% from a lower tier, with interest. Private work is outside this statute.

Private work

Washington · Private workVerified 2026-09-22
Retainage cap
Not in our verified record
Deadline
Not in our verified record
Statute
Not in our verified record

Public work

Washington · Public workVerified 2026-09-22
Retainage cap
5%
Retainage on public improvement contracts may not exceed 5% of moneys earned, and it is held as a trust fund for claims and for state taxes. Contracts funded wholly or partly by federal transportation funds must rely on the contract bond instead of retainage. Any reservation from moneys earned other than as allowed by subsection (1) is prohibited. Contracts on projects funded in whole or in part by the farmers home administration and subject to its regulations are outside RCW 60.28.011(1)-(9) (RCW 60.28.011(10)). Small public works contracts under $5,000 carry no retainage requirement, and on small works contracts the awarding agency may reduce or waive retainage, assuming the liability for claims (RCW 39.04.152(5)).
Deadline
60 days
Completion of all contract work (or, on the general contractor/construction manager delivery method, acceptance of a completed subcontract plus a 45-day lien-notice period under RCW 60.28.021).
Statute
RCW 60.28.011.
What the statute says
Except as provided in (b) of this subsection, public improvement contracts must provide, and public bodies must reserve, a contract retainage not to exceed five percent of the moneys earned by the contractor as a trust fund for the protection and payment of: (i) The claims of any person arising under the contract; and (ii) the state with respect to taxes...
RCW 60.28.011. · Official text · retrieved 2026-09-22

Who this applies to

RCW 60.28.011 is expressly limited to public improvement contracts and public bodies [1], and this page deals only with that public-work rule. On a private project, the retainage terms are for the contract, and a lawyer who has read it, to settle.

Within public work, the statute touches three parties:

Contracts funded wholly or partly with federal transportation funds work differently: they rely on the contract bond instead of retainage.

What the rule says

The 5% [1] figure is a ceiling on reservations from moneys earned, and any other reservation from moneys earned is prohibited. The amount can fall during the job. At any time, the contractor may ask for retainage to be reduced to 100% [1] of the value of the work remaining on the project. After all work other than landscaping is complete, the contractor may request full release, with 5% [1] of moneys earned for landscaping still retained.

Release in full is due 60 days [1] after completion of all contract work, subject to chapter 39.12 RCW, the prevailing wage chapter, and to chapter 60.28 itself [1]. On the general contractor/construction manager delivery method, the release trigger can instead be acceptance of a completed subcontract, followed by a 45-day lien-notice period under RCW 60.28.021 [1].

How to comply

  1. Compare the contract's retainage clause with 5% [1] of moneys earned, and a subcontract's with the same 5% [1] limit on withholding from a lower tier.
  2. Mark the 60-day [1] date from completion of all contract work; that is when the public body owes full release and payment.
  3. A bond can take the place of the cash. Under RCW 60.28.011(6), a surety bond may be substituted for retainage, and the bonded retainage is released within 30 days [1].
  4. Follow the interest. When retainage is deposited in an interest-bearing account or escrow, the interest is paid to the contractor.

The section itself sets no penalty for late release. The full text of RCW 60.28.011, the contract and the release procedure in RCW 60.28.021 are the places to confirm how a given job closes out [1].

What changed recently

The section was last amended by 2017 c 302 s 1 [1]. Earlier entries in its history include 2015 c 280, 2013 c 113 and 2011 c 231 [1], two 2009 chapters (c 432 and c 219) and, at the oldest end, 1992 c 223 [1].

Related

Run the numbers for Washington

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. RCW 60.28.011, Retained percentage - Public transportation projects - Labor and material lien created - Bond in lieu of retained funds ... (retrieved 2026-09-22)
  2. RCW 39.04.152, small works roster contract procedures, Washington State Legislature (retrieved 2026-10-17)

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.