Prompt payment interest calculator
Prompt payment statutes turn a late cheque into a debt that grows. The federal rate is published twice a year and most states have their own act with its own rate and its own clock. This computes simple interest on the unpaid principal for the days it was actually late.
Simple interest on the unpaid principal, actual days over 365. Pre-filled with the federal rate published for July 1 - December 31, 2026; overwrite it with your state's rate or your contract's.
14 on federal construction progress payments (FAR 52.232-27).
Federal rate for July 1 - December 31, 2026: 4.75%.
| Payment due | 2026-07-29 |
| Days late | 37 |
| Principal unpaid | 48,450.00 |
| Interest at 4.75% for 37 days | 233.29 |
| Total claimed | 48,683.29 |
What the interest is actually for
Interest under a prompt payment act is not a penalty you have to sue for — on federal work it accrues automatically once a proper invoice goes unpaid past its due date. The number is usually small next to the principal. Its value is as leverage: a payable that is quietly growing is a payable somebody in accounts wants closed.
Two definitions carry the whole calculation. A proper invoice is one with every element the contract requires — get one element wrong and the clock never started. And the due date is set by the contract or by statute: 14 days on federal construction progress payments, with retained amounts released by the date the contract names or the 30th day after final acceptance.
Where the days come from
| Input | Source | Trap |
|---|---|---|
| Invoice received | Billing office date stamp | Not the date you posted it. |
| Days allowed | Contract, or 14 days federal | A “net 30 from approval” clause moves the goalposts. |
| Improper invoice | Must be returned in 7 days | A late rejection does not stop the clock cleanly. |
| Paid date | Date funds are available | Cheque date and cleared date are different days. |
| Rate | Published semi-annually | Use the rate for the period the debt ran. |
Private jobs are governed by state prompt payment acts, not the federal one, and the rates and windows differ. Use your state's figure in the rate field, and read the act — several allow attorney fees to the prevailing party, which changes the arithmetic of the whole dispute.
Sources
- U.S. Treasury, Bureau of the Fiscal Service - Prompt Payment interest rate
The federal Prompt Payment interest rate for July 1 - December 31, 2026 is 4.75%. Treasury publishes a new rate every six months.
Read 2026-09-04
- FAR 52.232-27(a)
On a federal construction contract, a progress payment is due 14 days after the designated billing office receives a proper payment request; an improper invoice must be returned within 7 days with reasons.
Read 2026-09-04
- 31 U.S.C. § 3903(a)(6)
Retained amounts on a federal contract must be released by the date the contract specifies or, if it specifies none, by the 30th day after final acceptance.
Read 2026-09-04
- 31 U.S.C. § 3903(a)(10)
Federal agencies aim to pay small-business prime contractors within 15 days of a proper invoice when the contract sets no payment date.
Read 2026-09-04