Progress Payment - How are progress payments calculated?

Q: How are progress payments calculated?

There is no single method of calculating progress payments, but the most common formula is the percentage of completion applied to the total contract price, less retainage which is held by the project owner until final acceptance of the project.

Answer

The most popular way to determine progress payments is to take the percentage of completion and apply it to the entire contract price. Then, deduct the retainage, which is kept by the project owner until final acceptance, from that amount. While there is no one exact formula, this is usually how progress payments are calculated.

Progress Payment - How are progress payments calculated?

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