How to Set Up Tax and Retentions in Mastt

Tax and retentions are essential for accurate payment processing in construction projects. 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.

Before You Start

• Contract must be created with a contract standard set (required to access the Terms tab)
• All figures entered in Mastt should be before tax
• Tax is only applied on exports (payment certificates, schedules, change order letters)

Setting Up Contract-Level Tax

Contract-level tax applies a single tax rate to all line items within a contract. This is the quickest method when all items have the same tax treatment.

Navigate to Your Contract

1. Click Cost in the left navigation bar
2. Click Contract in the top navigation bar
3. Click the Action button beside the contract you want to configure, then click Edit

Access the Terms Tab and Enter Tax

1. Click the Terms tab in the middle of the contract form
2. Scroll down to find the Tax % field
3. Enter your tax percentage (e.g., 0% for tax-free contracts, or your applicable rate)
4. Click Update to save — all line items in this contract will now have the specified tax rate applied automatically

Setting Up Line Item-Level Tax (Contracts and Variations)

Line item-level tax lets you apply different tax rates to individual line items within the same contract. This is useful when some items are taxable whilst others are tax-exempt. Line-item tax works identically for both contracts and variations.

Set Tax for Individual Line Items

1. Open your Contract or Variation form and scroll down to the line items table
2. Scroll horizontally to locate the Tax % column (at the right end of the table)
3. Click into the Tax % field for the line item you want to configure
4. Enter the tax percentage (e.g., 0% for tax-exempt, or your applicable rate)
5. Repeat for each line item requiring a specific tax rate
6. Click Update (or Add if creating a new contract)

Setting 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.

Access the Retention Section

1. Open your payment form
2. Scroll to the bottom and click the Retention accordion to expand it

Choose Your Retention Method

You have two options:

• 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.

Payment Register

• Navigate 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
• The Retention Amount column now appears in your Payment Register, showing the retention withheld on each individual payment and the total retention held at the contract level

Overall Page

• The Total Paid column excludes retained amounts — it reflects only the cash actually released
• The remaining amount calculation uses: Forecast Final Cost (FFC) minus Total Paid, Total Submitted, Total Approved, and Total Retained

Cashflow

• Retained amounts appear in the Cashflow view and sit in the unassigned column, representing funds you can release in the future
• This ensures your cashflow reporting reflects the true cash position of the project

Dashboard Module

• A Total Retained big number tile shows the total amount retained against the project
• Payment Breakdowns and Cost Overviews also display retention amounts broken down by category

Understanding 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:

1. Remove retention amounts from the gross payment total
2. Calculate tax on the amount remaining after retentions are deducted
3. Apply tax to get the final payment amount

Calculation example:

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.

Troubleshooting & FAQs

Q: What if the Terms tab doesn't appear in my contract?

Open your contract and complete the Contract Standard field in the Contract Details section first. Once set, the Terms tab will become available.

Q: 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.

Q: 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.

Q: 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.

Q: What if my Payment Certificates aren't calculating tax correctly?

Check that all line items and variations have a tax rate set. If there is no entry in the Tax % field for a line item or variation, it is assumed to be tax-free.

Q: Why doesn't the Amount Paid on the Overall page match my total approved amount?

The Amount Paid excludes retained amounts — it reflects only the cash actually released. Check the Total Retained figure to reconcile the difference.

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