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Construction holdback
calculator
Work out what a progress draw actually pays you after statutory holdback — and when the GST on that holdback is really due. Built for Canadian trade subcontractors.
Alberta, BC, Saskatchewan, Manitoba and Ontario rates built in. Download the draw summary as a PDF — nothing leaves your browser.
This progress claim
Under Alberta’s Prompt Payment and Construction Lien Act, that holdback is normally retained for 60 days after substantial performance before it can be released.
Take it to the draw meeting
One page, ready to attach to your progress claim. Generated in your browser — nothing is uploaded and nothing is stored.
This calculator is a planning tool, not legal or tax advice. Holdback rates, retention periods and tax treatment vary by jurisdiction, by contract, and by project type — Alberta alone holds 90 days rather than 60 on concrete and on oil and gas work. Confirm the numbers for your project with your lawyer and your accountant before you invoice.
The part nobody explains
Holdback is not a discount
Every province except Quebec runs some version of the same system. A percentage of each progress payment gets retained rather than paid, and it sits as a fund that anyone further down the chain can lien against if they do not get paid. The general contractor is not doing it to you. In most cases they are legally required to, and they cannot contract out of it.
What that means for a sub is simple and unpleasant: on a $500,000 contract you are financing $50,000 of somebody else’s risk for the length of the job plus the lien period. That is real money, it is usually more than your net margin on the job, and it is the reason a profitable sub can still run out of cash.
Two things make it worse than it needs to be. The first is billing late — every week you delay a draw is a week further out on money you have already spent on labour and material. The second is unapproved change orders, because work you performed but never got approved is not in the value of work in place at all, so it is not even earning its holdback yet.
The GST timing nobody uses
This one is worth actual money. Under the Excise Tax Act, GST or HST on a holdback is payable on the earlier of the day the holdback is paid to you and the day the holdback period expires. You do not have to remit tax on money that is being withheld from you. Plenty of subs invoice GST on the full draw anyway and end up fronting the CRA out of pocket for the length of the job. Toggle it in the calculator above and watch what it does to the net.
Rates by province
The statutory percentage is fixed by each province’s lien legislation, so it does not move from project to project. Retention periods are the more slippery number — they run from substantial performance rather than from your last invoice, and some work types are treated differently.
| Province | Holdback | Typical retention | Legislation |
|---|---|---|---|
| Alberta | 10% | 60 days | Prompt Payment and Construction Lien Act |
| British Columbia | 10% | 45 days | Builders Lien Act |
| Saskatchewan | 10% | 40 days | Builders' Lien Act |
| Manitoba | 7.5% | 40 days | Builders' Liens Act |
| Ontario | 10% | 60 days | Construction Act |
Alberta retains 90 days rather than 60 on concrete and on oil and gas work. Ontario’s Construction Act was amended effective January 1, 2026 to make annual holdback release mandatory. Quebec does not use a statutory holdback in the same form — retention there is a contract term. None of this is legal advice; confirm your project with your lawyer.
Questions subs actually ask
Holdback, answered
What is a construction holdback?
A holdback is a percentage of every progress payment that the payer is required by lien legislation to retain rather than pay out. It sits as a fund that unpaid subcontractors and suppliers can claim against if someone further up the chain does not get paid. It is not a penalty and it is not discretionary — in most Canadian provinces the payer is legally required to hold it back, and cannot waive it by contract.
How much is the holdback in Canada?
Ten percent of the value of work done is the standard across most of Canada, including Alberta, British Columbia, Saskatchewan and Ontario. Manitoba is the notable exception at 7.5%. The percentage is set by each province’s lien legislation, so it does not change from project to project within a province.
How long is holdback held for in Alberta?
Under the Prompt Payment and Construction Lien Act, the 10% holdback is normally retained for 60 days after a certificate of substantial performance is issued, or 60 days after completion where no certificate is issued. Concrete work and oil and gas work are held for 90 days instead of 60. On contracts over $10 million running longer than a year, progressive or phased release is required rather than waiting until the end.
Do I charge GST on the holdback?
Not at the time you invoice, under the general CRA position. The Excise Tax Act treats GST or HST on a holdback as payable on the earlier of the day the holdback is actually paid out and the day the holdback period expires. In practice that means you invoice tax on the amount you are actually being paid now, and the tax on the holdback follows when the holdback is released. Confirm the treatment with your accountant, because how your contract is written can change it.
How do I calculate a progress draw with holdback?
Start from the value of work in place to date, including approved change orders. Subtract everything you have already billed on prior draws to get this claim. Take the statutory holdback percentage off that claim. Add GST or HST on the amount being paid now. What remains is your net payable. Your accumulated holdback grows with every draw and is released after the lien period.
Can I download the calculation as a PDF?
Yes, and it is free with no signup. Enter the project name and the draw number, then use the download button to get a one-page progress draw summary you can attach to your claim or take into a draw meeting. It shows the contract inputs, the holdback withheld, the tax treatment and the net payable. The PDF is generated in your browser, so nothing is uploaded and nothing is stored.
Can a general contractor hold back more than the statutory amount?
Some contracts attempt to hold additional retention on top of the statutory holdback, or hold back the full amount past the release date. The statutory holdback itself is fixed by legislation, but anything above it is a contract term you agreed to. Read the payment clause before you sign, and price the cash flow cost of any extra retention into your bid.
What happens if the holdback is never released?
Once the lien period has expired and no liens are registered, the holdback becomes payable. If it is not released, that is a collection matter and you may still have lien rights depending on timing. Keeping clean records of substantial performance dates, approved change orders and every draw you submitted is what makes that conversation short. This is where documentation, not argument, wins.
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SubTrade assembles the draw off your actual field data — hours, approved change orders and percent complete — with the holdback line already in it. $299/month, 5 users included.
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