The retention percentage and limit are set in the contract. 5% or 10% of each certificate, often capped at a share of the contract sum, is common. Half is typically released when the works are taken over and the rest at the end of the defects liability period, but the exact terms vary by contract.
Retention withholds payment, not value: the work has been done and certified. That matters for VAT and for cash flow, because a contractor can carry large retention balances across many finished projects.
How Civova handles it
Civova applies the contract's retention percentage on every payment certificate and records each retention release when it is certified.