A contractor's progress payment application bills $80,000 of completed work. The owner withholds 5% retention. How much cash will the contractor actually receive on this payment?

Explanation

Retention withheld = 5% x $80,000 = $4,000. Cash received = $80,000 - $4,000 = $76,000 (c); the $4,000 is collected later when retention is released. Civil Code §8811 caps private-works retention at 5% for contracts entered into on or after January 1, 2026. (a) $80,000 ignores the withholding. (b) $4,000 is the retention, not the payment. (d) $84,000 adds the retention rather than deducting it.