This guide shows you how to apply tax at contract and line-item levels, set up payment retentions, understand how they work together, and track retained amounts across your project. This keeps payment processing accurate for construction projects.
Before you start
- The contract must have a Contract Standard set (the Terms tab appears only after you select one). You can select the standard after the contract is created.
- All figures entered in Mastt should be before tax.
- Tax is only applied on exports (payment certificates, schedules, variation letters).
Choose how to apply tax
| Method | When to use it |
|---|---|
| Contract-level tax | Applies a single tax rate to all line items within a contract. The quickest method when all items have the same tax treatment. |
| Line item-level tax | Applies different tax rates to individual line items within the same contract. Useful when some items are taxable whilst others are tax-exempt. |
Set contract-level tax
Open your contract
- Click Cost in the left navigation bar.
- Click Contracts in the top navigation bar.
- Click the Action button (three dots) beside the contract you want to configure, then click Edit Contract.
Enter the tax rate on the Terms tab
- Click the Terms tab in the middle of the contract form.
- Scroll down to find the Tax % field.
- Enter your tax percentage (e.g., 0% for tax-free contracts, or your applicable rate).
- Click Update to save. A line item with no Tax % of its own counts as 0%, so check the Tax % column on the Line Items tab (see below).
Note: The Terms tab only appears after you've selected a Contract Standard.
Set line item-level tax (contracts and variations)
Line-item tax works identically for both contracts and variations.
- Open the contract (Action > Edit Contract) or the variation (Action > Edit Variation), then click the Line Items tab.
- Scroll horizontally to locate the Tax % column (at the right end of the table).
- Click into the Tax % field for the line item you want to configure.
- Enter the tax percentage (e.g., 0% for tax-exempt, or your applicable rate).
- Repeat for each line item requiring a specific tax rate.
- Click Update (or Add if creating a new contract).
Warning: Line item-level tax overrides contract-level tax for that specific item. For example, if contract-level tax is set to 10% but a line item has 0% entered, that line item will be tax-exempt.
Set up payment retentions
Retentions are amounts held back from payment until certain conditions are met, such as project completion or the end of the defects liability period.
Open the Retention section
- Open your payment form.
- Scroll to the bottom and click the Retention accordion to expand it.
Choose your retention method
| Method | How it works |
|---|---|
| Retained This Payment (dollar amount) | Click into the Retained This Payment field and enter the exact dollar amount to retain (e.g., $5,000). Use this method when you know the exact retention amount or need to retain funds on variations. |
| Percentage | Click into the Percentage field and enter the percentage to retain (e.g., 10%). This method only calculates on contract line items, NOT on variations. |
Click Update to save the payment with retention applied.
Where retentions appear in Mastt
Once you apply retentions to payments, the retained amounts flow through to several areas of the platform for full visibility.
| Area | What you see |
|---|---|
| Payment Register | Shows retention per payment and total held per contract (see steps below). |
| Overall page | The Total Paid column excludes retained amounts and reflects only the cash actually released. |
| Cash Flow | Retained amounts appear in the Cash Flow view and sit in the unassigned column, representing funds you can release in the future. |
| Dashboard Module | A Total Retained KPI tile shows the total amount retained against the project. Payment Breakdowns and Cost Overviews also display retention amounts broken down by category. |
To show retention in the Payment Register:
- Go to the Payments page and use the Group By dropdown to group by Contract.
- Click Columns in the top-right toolbar and enable the Retention Amount column.
Amount Remaining on the Overall page is calculated as Forecast Final Cost (FFC) minus Paid, Approved and Submitted payments and Total Retained.
Understand retention rules
- Percentage retentions only apply to contract line items — variations are excluded. To retain funds on variations, use the Retained This Payment field and enter the dollar amount manually.
- Per-payment calculations — each payment can have its own retention amount or percentage, giving you flexibility as the project progresses.
- No line-item retentions — Mastt does not currently support line-item level retentions. Retentions apply at the payment level only.
Example: To retain 10% on both a $100,000 contract and $20,000 variation, enter $12,000 in the Retained This Payment field ($10,000 contract + $2,000 variation).
How tax and retentions work together
When you export payment certificates or schedules, Mastt calculates amounts in this order:
- Remove retention amounts from the gross payment total.
- Calculate tax on the amount remaining after retentions are deducted.
- Apply tax to get the final payment amount.
| Calculation example | Amount |
|---|---|
| Starting amount | $100,000 |
| Retention (10%) | -$10,000 |
| Subtotal after retention | $90,000 |
| Tax (GST 10%) calculated on $90,000 | +$9,000 |
| Final payment | $99,000 |
Tax is calculated on $90,000 (after retention), not on the original $100,000.
Tip: Always review exported payment certificates to ensure tax and retention calculations are correct before sending to clients.
Troubleshooting and FAQs
What if the Terms tab doesn't appear in my contract?
Open your contract and complete the Contract Standard field at the top of the contract form first. Once set, the Terms tab will become available.
Why isn't my percentage retention including variations?
The percentage retention method only calculates on contract line items by design. To retain on variations, use the Retained This Payment field and enter the dollar amount manually.
What if I need different retention amounts for different line items?
Line item-level retentions aren't currently available. Retentions are applied at the payment level, so the same retention treatment applies to all line items within that payment.
How do I verify my tax and retention calculations are correct?
Export a payment certificate and review the breakdown. It will show gross amount, retentions deducted, subtotal, tax applied, and final payment amount in the correct order.
What if my Payment Certificates aren't calculating tax correctly?
Check that all line items and variations have a tax rate set. A line item with no entry in its Tax % field counts as 0% (tax-free), even if the contract has a Tax % set.
Why doesn't the Total Paid on the Overall page match my total approved amount?
The Total Paid excludes retained amounts — it reflects only the cash actually released. Check the Total Retained figure to reconcile the difference.
Need help?
Contact Mastt Support for assistance with tax and retention configuration.