When a part of each progress billing is held back, what is it referred to as?

The term used to describe the portion of each progress billing that is withheld until the completion of a project is known as retainage. This practice is common in construction and contracting to ensure that the contractor completes the work satisfactorily. By holding back a certain percentage of the payment, the owner or client ensures that there is an incentive for the contractor to finish the project on time and meet all specified quality standards.

Retainage serves as a form of security for the client, allowing them to mitigate risks associated with delays or subpar work. Typically, the withheld amount is released only after the project has been completed and final inspections have been performed, confirming that all work has been carried out according to contractual obligations.

Other options like retainer, retainment, and retention may seem similar but do not specifically address the portion withheld for performance assurance in a contractual context, making retainage the precise terminology used in this scenario.