Chirayuthchai TraisaengsatheanStrategic Finance for Property Development
THEN

Retention

Calculates retention deducted from each progress payment subject to the cap, VAT and WHT, and the release schedule on handover and at the end of the DLP

Read alongside Real Estate Project Law Handbook: A Practical Guide · Part 3
The figures entered are hypothetical examples; every field can be edited.

1Contract & progress payments
THB
Progress payment split
    % of contract value per payment. Press Enter to move to the next payment, or paste a row of figures from Excel into one box.
    2Retention terms
    % of work value · market 5-10
    % of contract value

    3Release schedule
    % of total retention; the rest is released at the end of the defects liability period (DLP)

    Practical Completion
    months from handover
    days after entitlement
    4Tax & set-off
    % · check rate on payment date
    % on contractor services
    Leave unticked for a condominium developer subject to SBT; VAT is then a project cost
    THB, set off against the final release. Enter 0 if none
    Total retention held–
    Net cash on handover–
    Net cash at DLP end–

    Retention balance across the contract

    Retention release

    Payment ledger

    Progress payments and retention releases (THB). Figures in brackets are deductions.
    ItemValue of workRetentionAmount paid (excl. VAT)VATWHTNet cashRetention held

    Contract summary

    Total excl. VAT
    –
    Total VAT
    –
    Total WHT
    –
    Total cash paid (before back-charge)
    –
    Total cash paid after back-charge
    –
    Project cost (before back-charge)
    –

    Results are calculations for learning purposes only. The figures entered are hypothetical examples, not real project data, and are not investment or tax advice.

    How to use

    1. Enter the contract value and build the progress payment split; the meter turns green when the split totals 100%
    2. Set the retention rate and cap, then the share released on handover, the handover date and the DLP
    3. Enter the VAT and WHT rates and any back-charge, then review the balance chart, the payment ledger and the two release cards

    Assumptions and limitations

    • Retention for this progress payment = MIN(value of work for the payment × deduction rate, cap − cumulative retention). Use the value shown in the payment certificate.
    • VAT and WHT are calculated on the amount actually paid, while retention is calculated when it is released or set off. If a tax invoice for the full progress payment is issued before payment is received, VAT arises immediately. The method of issuing invoices should be agreed in the contract and confirmed with the accounting firm.
    • WHT on the amount released is calculated on the full amount before the back-charge is set off, because payment includes set-off. If WHT has already been withheld from the full progress payment, do not withhold again on release.
    • The back-charge is deducted from the final retention release, and no separate VAT is calculated on it. Written notice must be given and evidence kept.
    • The 7% VAT rate is the default, based on the rate extended to 30 Sep 2027 (Royal Decree No. 807). WHT and VAT rates must be checked on the payment date.
    • In the private sector, terms are set by contract; public-sector projects are governed by public procurement law instead.
    Actual terms follow the contract. A contractual DLP does not remove liability under the law. Have legal counsel and the accounting firm confirm before use.

    Tools to use together