Nebraska retainage

Who and what this applies to

Construction Prompt Pay Act contracts excluding State contracts and specified state-paid aid projects; residential improvements of no more than four units are also excluded.

Thresholds and scope

Contract retainage rate cannot exceed 10%; further payments have a 5% limit after the qualifying 50%-complete point.

The rules

• Section 45-1202 excludes State contracts and specified state-paid aid projects from contractor/subcontractor coverage. Source
• Residential improvements of four or fewer units are excluded. Source
• After the scope is 50% complete with contractual performance and satisfactory reasonable assurances of continued performance/financial responsibility, retainage on additional progress payments is at most 5%. Other withholding is limited to the listed reasonable contractual grounds; after substantial completion, it cannot exceed 125% of remaining work cost. Source
• Owner retainage for compliant work releases within 45 days after substantial completion of the project/designated portion. Contractor pass-through is due within ten days of receipt when subcontract performance and payment conditions are satisfied. Source

Primary sources

• Neb. Rev. Stat. §45-1202
• Neb. Rev. Stat. §45-1207
• Neb. Rev. Stat. §45-1204
• Neb. Rev. Stat. §45-1203(3)

Sources reviewed 2026-09-30. This guide covers the projects and rules stated above.

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