Two things decide whether a job in Georgia makes you money: getting the license your work needs, and setting aside the right tax. Georgia licenses its contractors and taxes their profit, so both are worth getting right before you take work on.
Each section below points to a tool that runs your exact numbers for Georgia.
Tax in Georgia
Georgia has a flat 4.99% state income tax on top of your federal taxes. A flat rate makes the math simple: the same percentage applies whatever you earn. You still owe federal income tax and self-employment tax on your profit as well, and you make estimated payments to both the state and the IRS through the year.
On sales tax, Georgia follows the usual rule for the trades: your labor is not taxed, and you pay sales tax on your materials when you buy them rather than charging it to the customer.
Work out what to hold back on the Tax Set-Aside Calculator, which runs the federal and self-employment numbers for Georgia.
Getting paid: liens and retainage
A mechanic's lien is the tool that actually gets a Georgia contractor paid, and in Georgia you generally have to record it within 90 days of your own completion or last furnishing, not the whole job finishing. There is usually an earlier notice to send first, so do not wait until the filing deadline to start. Miss it and you lose the lien, so the dates matter.
Enforcing it has its own clock. 365 days from the day you filed the lien, and within 30 days of starting that action you must file a notice of it with the superior court clerk (44-14-361.1(a)(3)). THIS CAN BE CUT SHORT: the owner or contractor can record a Notice of Contest of Lien, which gives you 60 days from receipt to sue - the lien is extinguished by law 90 days after that notice is filed if you have not (44-14-368). Work out your dates on the Lien Deadline tool, and if they are close, get an attorney to confirm them against the statute (O.C.G.A. 44-14-361, 44-14-361.1, 44-14-361.5, 44-14-368).
On money held back as retainage, here is where Georgia lands:
- Private work: No statutory cap on private work in Georgia. Whatever your contract says governs, so read the withholding clause.
- Public work: 5% of each progress payment where the contract value at award exceeds $250,000 and its duration exceeds 45 days; HB 137 raised that threshold from $150,000 on 1 July 2025. 5% of the gross value of the completed work, cumulative, NOT each payment.
- Release: Private: no number of days is set at all. It falls due on whatever the contract says. Public: 30 days (the statute does not say whether these are calendar or business days) from the invoice and other appropriate documentation required by the contract documents are provided, following substantial completion of the work as the owner's authorized contract representative determines it to be reasonably satisfactory.
- Prompt pay: A contractor must pass retainage down within 10 days of receiving it. Late payment carries 1% a month on the unpaid balance from the day after it fell due, but only if the person being charged was told about the provision when payment was requested.
Check the size of the job before you check the percentage. Georgia's cap does not reach every contract. The condition on it, in the statute's own terms: the contract value at award exceeds $250,000 and its duration exceeds 45 days; HB 137 raised that threshold from $150,000 on 1 July 2025.
Heads up: Georgia DOT road, bridge and highway work is expressly excluded from the §13-10-80 cap and no numeric statutory ceiling for it was found; the percentage there is whatever the contract says.
Check the Retainage Calculator before you sign a contract that holds back more.
Free Georgia retainage letters
Three letters written for Georgia's rules, with the state's own release clock and its statutory citation already in them. Fill one in on screen and download it as a PDF or a Word file.
- Retainage Release Request (Georgia), for when the job is done and the money has not come back
- Retainage Overdue: Demand for Payment (Georgia), for when the release date has passed and nothing has arrived
- Retainage Held Above the Cap: Challenge Letter (Georgia), for when more is being held than the state appears to permit
Do you need a license in Georgia?
Georgia requires a state contractor license to take building work on. The threshold that triggers it: Residential above $2,500. COMMERCIAL general contracting has NO dollar figure, it is a work-type test with class subclassifications. Working unlicensed when your job needs a license is the expensive mistake here. 43-41-17(c) preempts local licensing unless the local requirement predates 1 July 2004 and is at least as strict. The board's rules chapter still carries the pre-2024 name; 2024 Ga. Laws 583 renamed it in the Code. The license comes from State Licensing Board for Residential and Commercial General Contractors. Georgia accepts the NASCLA commercial exam, useful if you work across state lines.
Trade licenses for electrical, plumbing and HVAC are usually separate and often required even where a GC license is not. See what applies to your trade on the Contractor License Checker.
Building codes and permits
Georgia adopts its building codes statewide, so the rules travel with you across the state. Editions still move, so confirm yours with the building department before you price a job.
- Homes: 2024 (with Georgia Amendments 2026, in force since 1 January 2026)
- Electrical: 2023 (with Georgia Amendments 2026)
- Energy: 2015 (with Georgia Supplements and Amendments revised 2020, 2022 and 2023; the base edition has not moved since 2020)
- Plumbing: 2024 IPC (with Georgia Amendments 2026)
Every Georgia code carries two year numbers, and they are not the same thing: the model edition, and the Georgia Amendments vintage layered on top. The energy code is where that bites, because the amendment packages are labeled 2020, 2022 and 2023 while the underlying IECC is still 2015. Build to the base edition wherever the Georgia Amendments are silent and to the Amendments wherever they conflict; DCA says the Amendments take precedence in terms. The codes apply statewide automatically under O.C.G.A. §8-2-25(a) without any local adoption, so a jurisdiction that has passed nothing is still covered. A local government may adopt stricter amendments through the 60-day DCA review, never weaker ones, and must tell you at permit issue if any are on file.
Source: Georgia Department of Community Affairs, Current State Minimum Codes for Construction; Ga. Comp. R. & Regs. ch. 110-11-1; O.C.G.A. §§8-2-20 and 8-2-25 (Uniform Codes Act). Read against that source on 2026-08-25.
Check a specific job on the permit tool.
Pay and workers' comp
The minimum wage in Georgia is the federal $7.25 an hour. Georgia's OWN minimum wage is $5.15, applicable to employers of 6 or more employees. The $7.25 shown reaches you only through the federal FLSA. Employment outside FLSA coverage in Georgia is legally payable at $5.15. Whether it binds a particular job turns on whether the FLSA reaches that employment, which is the part most people miss. Check a rate on the minimum-wage tool.
On workers' comp, the rule that catches people out in Georgia is who has to be covered. Sole proprietors are exempt; corporate officers can elect to exclude themselves. Get a premium range for your trade on the Workers' Comp Estimator.
If a client will not pay
If a client will not pay, you can sue for up to $15,000 in Georgia's Magistrate Court. That covers most unpaid-invoice disputes for a small outfit; a bigger claim goes to regular civil court where you will probably want an attorney. Walk through whether filing is worth it on the Small Claims checker.
The clock runs the other way too: a client generally has 6 years to sue you over the work under a written contract in Georgia, and there is no absolute cutoff, so your exposure turns on when a defect is found. Work out your exposure on the Warranty & Claim Deadline tool.
Common questions
How much state income tax will I pay in Georgia?
Georgia has a flat 4.99% state income tax on your profit, on top of federal income tax and self-employment tax. Use the Tax Set-Aside Calculator to see what to hold back.
Do I need a contractor's license in Georgia?
Yes. Georgia requires a state contractor license. The threshold: Residential above $2,500. COMMERCIAL general contracting has NO dollar figure, it is a work-type test with class subclassifications. It is issued by State Licensing Board for Residential and Commercial General Contractors.
What is the small claims limit in Georgia?
You can sue for up to $15,000 in Georgia's Magistrate Court. The filing fee is typically $50 to $90. Larger claims go to regular civil court.
How long do I have to file a mechanic's lien in Georgia?
Generally 90 days from your own completion or last furnishing, not the whole job finishing, and there is usually an earlier notice to send first. Miss it and you lose the lien. Work your own dates out on the Lien Deadline tool.
How much retainage can be held back in Georgia?
Public: 5% of each progress payment where the contract value at award exceeds $250,000 and its duration exceeds 45 days; HB 137 raised that threshold from $150,000 on 1 July 2025. Public, water and sewer: 5% of the gross value of the completed work, cumulative, NOT each payment. Run your own figure on the Retainage Calculator.
Are there free Georgia contract and payment forms?
Yes. This page links 3 retainage letters written to Georgia's own release clock and carrying its statutory citation. They are free, there is no sign-up, and you fill one in on screen and download it as a PDF or a Word file.
What is the minimum wage in Georgia?
$7.25 an hour, the federal floor. Georgia does not set a higher rate of its own, so that floor reaches a worker through federal FLSA coverage rather than through state law. Check a specific job on the minimum-wage tool.
The honest bit
These are the 2026 rules for Georgia as they stood when this guide was written, and they change: legislatures move thresholds, deadlines and rates every year. Treat this as general guidance to point you in the right direction, not legal, tax or financial advice. Verify anything you rely on at the source (the IRS, the Georgia tax and licensing agencies, and your local building department) or with a professional. Where Georgia does something unusual, the detail is called out above rather than glossed over.
Related: Tax Set-Aside Calculator · Mechanic's Lien Deadline · Contractor License Checker · Small Claims checker · Working in Your State
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Sources
- Georgia contractor licensing authority · Georgia contractor licensing authority. Who must hold a contractor or trade license in Georgia, and the licensing instrument (https://www.nascla.org/commercial-exam-participating-state-agencies/georgia-state-licensing-board-residential-and-general-contractors-0)
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