# Arizona — Construction retainage limits by US state — maximum withholding percentages, release deadlines, escrow requirements, and public vs private distinctions with statutory citations

For Arizona, public project retainage cap (%) is 10% before 50% complete; 5% after 50% complete; private project retainage cap (%) is no statutory cap in this section; release deadline is within 60 days after final completion and acceptance; escrow required is no (substitute security option available); milestone reduction is at 50% completion, half of retained amount returned and rate drops to 5%, recorded from its source on 2026-08-17.

- **State:** Arizona
- **Public project retainage cap (%):** 10% before 50% complete; 5% after 50% complete
- **Private project retainage cap (%):** no statutory cap in this section
- **Release deadline:** within 60 days after final completion and acceptance
- **Escrow required:** no (substitute security option available)
- **Milestone reduction:** at 50% completion, half of retained amount returned and rate drops to 5%
- **Statutory citation:** Ariz. Rev. Stat. § 41-2576 _(our reading, not quoted from the source)_

## What the source says

> Ten per cent of all construction contract payments shall be retained by this state as insurance of proper performance of the contract or, at the option of the contractor, a substitute security may be provided by the contractor in an authorized form pursuant to rules adopted by the director.

## Source

- https://codes.findlaw.com/az/title-41-state-government/az-rev-st-sect-41-2576.html

Last verified: 2026-08-17. Review by: 2027-08-17.
Part of [Construction retainage limits by US state — maximum withholding percentages, release deadlines, escrow requirements, and public vs private distinctions with statutory citations](https://referencesource.org/construction-retainage-limits-by-state/).