Free tool
Prompt Payment Interest Calculator
A payment is late. Put a number on it: interest accrued so far, what every extra day costs, and the total owed.
The past-due principal. Don't include interest already charged.
Contract due date, or the statutory deadline if the contract is silent. Our payment deadline calculator finds this date.
Defaults to today. Set a future date to project what waiting costs.
Pull this from the contract or your state's prompt-payment statute. Don't guess: the rate is the whole calculation.
What the late payment costs
45 days past dueDays late
45
And counting until the check clears
Interest accrued
$1,109.59
Simple interest at 18.00% annualized
Interest per day
$24.66
What every additional day of waiting costs
Total owed
$51,109.59
Principal plus interest through the date you set
Math runs in your browser. Nothing is sent to a server. Interest is computed as simple interest prorated daily; some contracts and statutes compound monthly or prorate differently, so confirm the method in your contract or state statute before invoicing. Not legal or accounting advice.
Why the daily number matters more than the total
Most payment conversations stall on principle: you say the money is late, they say it's processing. The interest figure changes the conversation because it moves. A $50,000 payment at 1.5% per month costs the payer about $25 every day it sits. Saying “this is costing you $25 a day and I'm obligated to invoice it” gets a different response than “please pay when you can.”
The legal footing comes from prompt-payment statutes. Every state has one for public work and most cover private construction, each naming a deadline and an interest rate for payments that miss it. The payment deadline calculator finds the due date; this one prices what happens after it. For how those deadlines play out across a project, typical payment terms for contractors walks through the Net 30 that becomes 83 days.
If the conversation doesn't move the check, the escalation path is written: a demand letter with the math, then an intent-to-lien letter, then the lien itself. Watch the clock on that last step: the lien deadline calculator shows how long you have.
Frequently asked questions
Can I charge interest on a late construction payment?
In most states, yes. Prompt-payment statutes set a default interest rate on late progress payments and retainage, typically between 0.75% and 2% per month depending on the state and whether the project is public or private. Many contracts set their own rate on top. The right rate for this calculator comes from your contract first, your state's prompt-payment statute second.
Where do I find the interest rate to use?
Two places. First, the contract: payment terms often name a finance charge or late-payment rate. Second, the statute: every state has prompt-payment rules for public work and most cover private work, each naming a rate. Federal work runs under the federal Prompt Payment Act, which ties the rate to a Treasury-published figure that changes twice a year.
Is the interest simple or compounded?
This calculator uses simple interest prorated daily, which matches how most prompt-payment statutes read. Some contracts compound monthly, which produces a slightly higher number the longer the payment drags. If your contract says compounded, treat this calculator's output as the floor, not the exact figure.
Does interest apply to retainage too?
In many states, yes, with its own clock. Retainage typically becomes due within a statutory window after substantial completion or punch-list signoff, and interest runs once that window closes. Enter the retainage amount and its statutory due date in this calculator the same way you would a progress payment.
What should I send along with an interest demand?
A written demand citing the contract terms and the state prompt-payment statute, with the math shown: principal, due date, days late, rate, and total. The copy-results button on this calculator gives you exactly that block. If the payment is far enough past due that lien deadlines are approaching, an intent-to-lien letter is the usual next step.
Does charging interest hurt the relationship?
Naming the number usually works better than threatening it. Most contractors bring the accruing interest figure into the payment conversation rather than invoicing it, because what they actually want is the principal. The daily-cost figure makes the cost of stalling concrete for the person holding the check.
Late payments usually start with a missing waiver
The most common reason a construction payment stalls is a lien waiver nobody signed. LienDone sends the right statutory form, your sub signs on their phone in two minutes, and the payment releases on schedule instead of accruing interest.
LienDone Inc.. Lien waivers signed in minutes, not weeks.