Retention is a deduction on the claim, not an afterthought
Retention held on a Hong Kong job is real money the paying party keeps back. Show it on the payment claim so the figure the response must answer is the net sum, not the gross.
QScope Team · 9 April 2026 · 6 min read
Retention is money earned but withheld, a percentage of the value of work done that the paying party keeps as security against defects and non completion. On a Hong Kong contract it is deducted on the face of the payment claim, so the net figure the paying party must respond to already carries the deduction.
Where it sits on the claim
Under the Construction Industry Security of Payment Ordinance the payment claim states what is due for the period. Retention reduces that figure, so it belongs on the claim as a line, not as a private adjustment you keep in your own spreadsheet.
- Deducted on the gross. Apply the contract retention percentage to the cumulative value of work done, then carry the held balance forward.
- Shown net. The amount claimed is after retention, so the payment response answers the sum that will actually move.
- Tracked to release. The held balance is a running total that has to come back, half typically at completion and the rest after the defects period.
Release runs on completion, not the calendar
Both the HKIA standard form and the government GCC tie retention release to project events, the certificate of completion and the end of the maintenance or defects liability period, rather than to a fixed date. That means release is only as reliable as your record of what has been certified and what remains held.
No tax to muddy the figure
There is no VAT or GST in Hong Kong, so retention arithmetic is clean. The percentage comes off the value of work, gross equals net, and there is no tax line sitting between the retention deduction and the sum claimed. That simplicity is worth guarding, because the mistake that costs money here is not tax, it is a held balance nobody chased.
The discipline
Deduct retention on every payment claim, carry the held balance as a live figure, and diary both release points against the completion certificate and the end of the defects period. The Ordinance sets the payment cycle, but retention release depends on you remembering money the paying party is in no hurry to return.
QScope calculates retention on every payment claim and tracks the held balance to release, so nothing is left uncollected at completion.