What is prompt payment in construction?

A statute that sets how many days an owner or agency has to pay a prime after a proper invoice, and how many days the prime then has to pay a sub. Interest often starts automatically when the clock is missed.

Is retainage the same as prompt payment?

No. Retainage is a percentage of billed work held until closeout. Prompt payment is the number of days to move progress payments. A state can cap retainage and still have a separate late-pay interest rate.

Which state’s retainage law applies?

The state where the project is located, plus whatever the subcontract says if it is stricter. Public and private jobs in the same state often have different caps.

State rules

Construction retainage and prompt-payment laws by state

Open your state for the retainage cap, a typical release clock, and how fast money is supposed to move from owner to prime to you. Planning summaries — confirm the current statute before you rely on a date.

Prompt payment in construction is the clock after a proper invoice: owner to prime, then prime to sub. Retainage is the percentage held until closeout. They are related cash-flow rules, not the same statute. Start with Florida, Texas, or California if that is the job; otherwise pick from the list.

Where is the job?

State and project type drive retainage caps and payment clocks

State

Project type

Caps and clocks change with project type, contract value, and the year you signed. Planning table only — confirm the current statute before you rely on a date.

Texas — private work

Retainage cap10% statutory retainage (Property Code Ch. 53)

Typical retainage release30 days after completion / statutory retainage period

Interest / penalty1.5% monthly automatic on late progress pay (Ch. 28)

Owner / agency to prime35 days after invoice (private, Prop. Code § 28.002)

Prime to sub (after prime paid)7 days after the prime is paid

Start in the codeTex. Prop. Code ch. 28 & 53; Gov’t Code ch. 2251

Texas private retainage is a 10% statutory scheme, not optional courtesy. Interest is automatic.

Summaries compiled for planning. This site is not a law firm.

Run the retainage dollars

Questions this page answers

What is prompt payment in construction?: A statute that sets how many days an owner or agency has to pay a prime after a proper invoice, and how many days the prime then has to pay a sub. Interest often starts automatically when the clock is missed.
Is retainage the same as prompt payment?: No. Retainage is a percentage of billed work held until closeout. Prompt payment is the number of days to move progress payments. A state can cap retainage and still have a separate late-pay interest rate.
Which state’s retainage law applies?: The state where the project is located, plus whatever the subcontract says if it is stricter. Public and private jobs in the same state often have different caps.