Free tool

Construction Draw Calculator

A draw is what you request against work performed since the last one. This is the contractor's side of it — what you draw against progress — rather than the lender's side, where a bank releases funds against an inspection. The two get confused constantly and they are not the same calculation.

Current draw

$123,350.00

Revised contract: $840,000.00
Earned amount: $378,000.00
Stored materials: $15,000.00
Gross draw: $393,000.00
Retainage withheld: $19,650.00
Previous draws: $250,000.00
Remaining balance: $462,000.00

How the calculation works

Revised contract: Contract value + Approved change orders
Earned amount: Revised contract × Work completed %
Gross draw: Earned amount + Stored materials
Retainage: Gross draw × Retainage %
Current draw: Gross draw − Retainage − Previous draws
Remaining balance: Revised contract − Earned amount; Work still to perform, excluding stored materials.

Worked example

Contract value: $800,000.00
Approved change orders: $40,000.00
Revised contract: $840,000.00
Work completed: 45%
Earned amount: $378,000.00
Stored materials: $15,000.00
Gross draw: $393,000.00
Retainage at 5%: $19,650.00
Previous draws: $250,000.00
Current draw: $123,350.00
Remaining balance: $462,000.00

Remaining balance is measured against earned work, not gross draw. The $15,000 of stored materials is money you can request now, but it does not reduce the $462,000 of work still to be built.

How to use it

01Enter the contract value and every change order the owner has approved. Pending changes are not part of the contract yet.
02Set work completed as a percentage of the revised contract, not the original value.
03Add stored materials only where your contract permits drawing against materials delivered but not yet installed.
04Enter previous draws as the cumulative total received, not the most recent one.
05Compare the current draw against what you expect to spend before the next one — that gap is your working capital requirement.

Common mistakes

Confusing a contractor draw with a loan draw

A lender draw is released against an inspection and a draw schedule agreed with the bank. A contractor draw is billed against work performed under the contract. They have different triggers, different documentation and different timing, and treating one as the other produces cash forecasts that never arrive.

Drawing against the original contract value

Approved change orders increase the base you are drawing against. Using the original value quietly understates every draw after the first change order lands.

Assuming stored materials are always drawable

Plenty of contracts require materials to be installed before they can be billed, or require proof of delivery, insurance and off-site storage arrangements. Check before including them.

Forgetting retainage compounds across draws

Five percent held on every draw is five percent of the whole contract by the end. On a $840,000 job that is $42,000 you have earned and cannot spend until release.

Questions

What is a construction draw?

A request for payment covering work completed during a period. On most projects draws are monthly and are supported by a schedule of values showing progress against each line item.

How is a draw different from a progress payment?

In practice they describe the same thing from different sides — the request and the payment. The term draw is more common where funds are being released from a construction loan or an agreed draw schedule.

Does this calculate construction loan draws?

No. This is the contractor's progress draw against work performed. Loan draws are released by a lender against inspections and their own schedule, and are calculated differently.

Should stored materials be included in a draw?

Only if your contract allows it. Where it does, there are usually conditions — proof of delivery, insurance, and sometimes off-site storage requirements. Where it does not, materials are billed when installed.

What is the remaining balance figure?

The revised contract less the amount earned. It is the value of work still to be performed, and deliberately excludes stored materials, which are billable but not yet built.