{"id":147486,"date":"2026-10-13T07:43:14","date_gmt":"2026-10-13T07:43:14","guid":{"rendered":"https:\/\/docs.daftra.com\/?post_type=faq&#038;p=147486"},"modified":"2026-10-13T07:43:54","modified_gmt":"2026-10-13T07:43:54","slug":"how-is-retention-calculated-on-a-payment-certificate","status":"publish","type":"faq","link":"https:\/\/docs.daftra.com\/en\/faq\/how-is-retention-calculated-on-a-payment-certificate\/","title":{"rendered":"How is retention calculated on a payment certificate?"},"content":{"rendered":"<p dir=\"ltr\">The <strong>Total Retention<\/strong> is calculated as a percentage of the <strong>Total Work Value<\/strong> on the payment certificate, according to the following formula:<\/p>\n<blockquote dir=\"ltr\">\n<p dir=\"ltr\"><strong>Total Retention = Total Work Value \u00d7 Retention percentage from the contract<\/strong><\/p>\n<\/blockquote>\n<p dir=\"ltr\">The retention percentage itself is taken from the <strong>&#8220;Retention&#8221;<\/strong> field defined on the underlying contract (not on the payment certificate itself), and the percentage is displayed explicitly in the field&#8217;s name, for example: <strong>&#8220;Total Retention (5%).&#8221;<\/strong><\/p>\n<p dir=\"ltr\"><strong>Example<\/strong><\/p>\n<p dir=\"ltr\">If the <strong>Total Work Value<\/strong> on the payment certificate is <strong>$200,000<\/strong>, and the <strong>Retention<\/strong> percentage defined on the contract is <strong>5%<\/strong>:<\/p>\n<blockquote dir=\"ltr\">\n<p dir=\"ltr\">Total Retention = 200,000 \u00d7 5% = <strong>$10,000<\/strong><\/p>\n<\/blockquote>\n<p dir=\"ltr\">The <strong>Subtotal Before Tax<\/strong> therefore becomes 200,000 \u2212 10,000 = <strong>$190,000<\/strong>.<\/p>\n<blockquote dir=\"ltr\">\n<p dir=\"ltr\"><strong>Note:<\/strong> this deducted amount (the retention percentage) is also used as the basis for calculating Tax 1 and Tax 2 for each work item individually (it&#8217;s deducted from each item&#8217;s value first, then the tax is calculated on the net), before the taxes are summed up at the payment certificate level.<\/p>\n<\/blockquote>\n","protected":false},"author":39,"template":"","categories":[15599,17195],"tags":[17963,17968,17969,17965,17967,17970,17964,17966,2351],"class_list":["post-147486","faq","type-faq","status-publish","hentry","category-construction","category-payment-certificates","tag-how-retention-is-calculated-on-a-payment-certificate","tag-payment-certificate-summary-items","tag-retention-deduction-example","tag-retention-percentage-from-the-contract","tag-subtotal-before-tax-calculation","tag-tax-calculation-after-retention","tag-total-retention-formula","tag-total-work-value-and-retention","tag----en"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How is retention calculated on a payment certificate? 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