What does it mean?
Retention is an amount withheld from payments where the contract permits it, usually in connection with completion obligations and defects. The percentage, cap, release events and payment process depend on the agreement and applicable rules. Do not assume a standard rate or release date. Retention affects cash received even when the gross measured value of the work is unchanged.
In practice
An illustrative 5% retention on an eligible valuation of 20,000 is 1,000, leaving 19,000 before other deductions. This example is arithmetic, not a statement of the rate for your contract.
Keep in mind
For a project record, note the document reference, revision and agreed measurement or contractual basis beside the quantity. Keep assumed information visibly separate from confirmed information. If two parties use different definitions or inclusions, resolve that difference before comparing amounts. These explanations are general estimating context; the wording of the applicable contract and its administration process must be checked for the particular job.