Free holdback calculator
Construction holdback calculator.
Enter the value of work done this billing period. See the holdback kept back, the amount payable now with its tax, and what you will invoice when the holdback is released.
Rates and rules checked November 13, 2026
When the holdback is released
What a holdback is
On most construction contracts, the owner (and every contractor who pays a subcontractor) keeps back part of each payment until the lien period is over. That money protects everyone below in the chain: if a supplier or sub isn't paid, they can claim against the holdback instead of the property.
Ontario's Construction Act sets the basic holdback at 10 % of the value of the work and materials supplied. British Columbia's Builders Lien Act and Alberta's Prompt Payment and Construction Lien Act also use 10 %. Other provinces set their own rules, and in Québec, where there is no statutory holdback, a retention (often 10 %) is written into the contract itself.
Tax on the holdback
Under the Excise Tax Act's holdback rule, the GST/HST on a holdback isn't payable until the holdback is paid or becomes due. So a progress invoice charges tax on the part paid now, and the release invoice charges tax on the holdback. That is what the calculator shows. Ask your accountant how you report it, especially if you file quarterly.
Prompt payment in Ontario
Since the 2019 prompt-payment rules, an Ontario owner has 28 days to pay a proper invoice, and a contractor has 7 days after being paid to pay its subcontractors. Holdback still comes off each payment; the clock only changes when the rest must be paid.
This calculator does arithmetic on the numbers you enter. It is not tax or legal advice; check your situation with the CRA, your provincial tax office or your accountant.
Questions contractors ask
Is the holdback 10 % of the whole contract or of each invoice?
Of each payment, as the work is billed. Add up the holdback on every progress invoice and you get 10 % of the work done so far.
Do I charge HST on the holdback amount?
Yes, but when the holdback is released, not on the progress invoice. The calculator shows both amounts.
Does holdback apply to small residential jobs?
The lien acts generally apply to residential work too, but many small renovation contracts are paid in a deposit and a final payment and nobody tracks holdback. Check your province's act and your contract before you deduct it or bill it.
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