A fixed percentage of each payment that is withheld until final completion is referred to as what?

The term that defines a fixed percentage of each payment withheld until the final completion of a project is referred to as "retainage." Retainage serves as a form of security for the party commissioning the work, ensuring that the contractor or service provider fulfills all obligations before the final payment is made. This practice helps ensure quality and completion of work and is a common procedure in construction and service contracts.

Retention is often used interchangeably with retainage, but it can sometimes refer to the broader concept of withholding payments, which may not directly imply the percentage aspect tied to completion. A deposit typically refers to an upfront payment made before work begins, often to secure services or goods, and is not contingent upon project completion. Reservation suggests a holding of some kind, which does not directly connect to the specific withholding of a percentage from payments tied to performance or completion.

Therefore, the correct term for the fixed percentage withheld until the final completion of the project is "retainage."