Progress Payment Calculator
Advance recovery, retention and the amount due this period.
Quick answer
With the default inputs: Contract sum 1000000 CNY · Value this period 200000 CNY · Cumulative before this period 400000 CNY etc.Amount due this period 154000 CNY
Edit the inputs below to recalculate.Inputs
Result
Amount due this period
154000CNY
| Total advance | 200000CNY |
| Recovery threshold | 300000CNY |
| Cumulative including this period | 600000CNY |
| Advance recovered to date | 20000CNY |
| Recoverable by now | 60000CNY |
| Recovered this period | 40000CNY |
| Retention this period | 6000CNY |
| Value this period | 200000CNY |
| Cumulative share of contract | 60.0% |
The recovery threshold means that once cumulative value reaches a set share of the contract sum, the client starts recovering the advance each period at the advance percentage. Retention is usually 3% of each period value, capped at 3% of the contract sum, released after the defects liability period. Note retention is calculated on the period value, not on the amount due — the difference matters.
Reverse: known result, work out one input
Enter a target result; the other inputs stay fixed and this one is worked out.
Formula
| Advance | contract × advance % |
| Threshold | contract × recovery start % |
| Recoverable | (cumulative − threshold) × advance % |
| This period | recoverable now − recoverable before |
| Retention | period value × retention % |
| Amount due | period value − recovery − retention |
A 1 million contract with 200,000 this period and 400,000 before, 20% advance, 30% threshold and 3% retention: 200,000 advance, 300,000 threshold, 40,000 recovered, 6,000 retention — 154,000 due.
How to work it out
- Line up the three figures first — contract value, value completed this period and cumulative value before this period — on the same basis: all inclusive or all exclusive of tax, and whether variations are included.
- Advance total A = contract value × advance percentage, typically 10-30% and covering material stocking.
- Set the recovery start point P = contract value × start percentage, typically 20-40%. Conceptually it is the moment when the value of materials still needed equals the advance.
- Cumulative recovery R = (cumulative value completed − start point) × advance percentage. Nothing is recovered until cumulative completion passes the start point.
- Recovery this period = cumulative recovery now − cumulative recovery last period. The difference method handles period boundaries automatically without double counting or omission.
- Retention Q = value this period × retention rate (typically 3-5%); payment due = value this period − recovery this period − retention.
Where it goes wrong
- Reading the start point as simply 30% of contract value. The proper formula is T = P − M/N, where P is contract value, M the advance and N the share of major materials — and it varies widely between projects. A flat 30% is wrong.
- Applying the advance percentage to this period's value. The advance is recovered against cumulative completion, so using one period alone miscalculates. Use the cumulative difference method.
- Calculating retention on contract value. Retention is deducted from each payment's actual value until the cumulative reaches 3-5% of contract value — it is not a single deduction on the contract sum.
- Forgetting the advance guarantee and the retention release date. Advances require a guarantee, and retention is released at the end of the defects liability period, usually one to two years. Both belong in the cash-flow forecast.
Material and cost
Market practice: advance 10-30% (government projects often 10-20% including material stocking), recovery start point 20-40%, retention 3-5% (3% common in building, 5% in municipal), progress payment ratio 70-85% on monthly measurement. Retention is released after one to two years, and since 2017 bank guarantees may replace cash — a significant cash-flow release.
On site
- The start point is a negotiation lever. A lower start point recovers the advance sooner and tightens the contractor's cash flow, so trading on it is often cheaper than cutting the price.
- Progress claims live or die on measurement records: concealed works inspections, photographs and material certificates. Missing one document invites a deduction.
- Retention can be replaced by a bank guarantee or insurance bond at roughly 1-3% per year, which is far cheaper than leaving 3% of cash tied up for two years.
- Submit variations with the progress claim. Holding them back until final settlement invites disallowance on grounds of time bar or inability to verify.
Basis
- Interim Measures for Settlement of Construction Project Payments, Caijian [2004] No.369
- GB 50500-2013 Code of bills of quantities and valuation for construction works, contract price and payment
- Measures for the Administration of Construction Quality Retention Money, Jianzhi [2017] No.138
FAQ
Why set the recovery threshold at 30%?
Because the advance exists to mobilise: buying materials and bringing in plant. By the time 30% of value is certified, materials have turned into work and progress payments sustain the site, so recovery no longer starves it. A lower threshold squeezes the contractor sooner; too high and the client carries more risk of misuse.
Can retention be replaced by a bond?
Yes, and more projects do. Rules on clearing construction deposits state that a bank guarantee or insurance policy may replace cash retention and the client must not refuse. A bond frees 3% of cash flow for a fee of roughly 1-2% a year, and it is worth writing into the contract.
What if the client delays payment?
Check the contractual payment period, typically 28-56 days; late payment carries interest at the market loan rate. Construction price priority rights protect the contractor, but the window is 18 months from completion and lapses after that. In practice the decisive thing is complete measurement and sign-off records — without them, a good case goes nowhere.
Cite this page
Use this format in reports, method statements or coursework. The link is permanent.
Building Calculator. Progress Payment Calculator. 2026-10-25. https://jianzhujisuan.com/en/progress-payment
Results are estimating aids only and are not a design basis. Construction and final accounts must follow the drawings, the applicable standards and an approved method statement. Anything affecting structural safety, shoring or falsework must be checked by a suitably qualified engineer.