Reference · United States · 2026
US late payment interest rates by state
In the US, late fees on B2B invoices are governed by your contract — there is no federal statutory fee. But when the contract is silent, every state has a legal rate of interest you can charge on an overdue invoice, mostly between 5% and 12% per year. Here is that rate for all 50 states, with the statute and a source per row.
Last verified July 9, 2026. Floating rows reset yearly or quarterly — check the note before relying on one.
Highlighted rows float — the figure shown is the published 2026 (or current-quarter) value.
| State | Rate | Statute | Worth knowing | Source |
|---|---|---|---|---|
| Alabama | 6% | Ala. Code § 8-8-1 | Accrues from the day the money should have been paid (§ 8-8-8). Written contract → 8%; ≥ $2,000 principal → any agreed rate (§ 8-8-5). | Source |
| Alaska | 10.5% | Alaska Stat. § 45.45.010(a) | On money after it is due. In litigation the rate drops to a Fed-discount-based formula (6.75% for 2026, AS 09.30.070). | Source |
| Arizona | 10% | Ariz. Rev. Stat. § 44-1201(A) | Any rate may be agreed in writing. Court-awarded prejudgment interest on liquidated claims uses the lower § 44-1201(B) rate (prime + 1). | Source |
| Arkansas | 6% | Ark. Code § 4-57-101(d) | Contracts may agree up to the 17% constitutional cap (amend. 89 § 3). Courts' prejudgment practice is locally described as unsettled. | Source |
| California | 10% | Cal. Civ. Code § 3289(b) | After a breach of contract not stipulating a rate. Ordinary trade credit is generally outside the usury rules; judgments also 10%. | Source |
| Colorado | 8% | Colo. Rev. Stat. § 5-12-101 | Compounded annually; the same 8% applies to money wrongfully withheld (§ 5-12-102). Agreement controls up to the 45% criminal ceiling. | Source |
| Connecticut | 8% | Conn. Gen. Stat. § 37-1 | Accrues from the debt's maturity. In litigation courts may instead award discretionary interest up to 10% (§ 37-3a). | Source |
| Delaware | 8.75% (Fed discount + 5) | 6 Del. C. § 2301(a) | Floats with the Federal Reserve discount rate at the time interest is due. Over $100,000 there is no limit on an agreed rate (§ 2301(c)). | Source |
| Florida | 8.06% (Q3 2026) | Fla. Stat. § 687.01 → § 55.03 | The CFO sets the rate quarterly; the same number serves contract debts and judgments. Q1 2026: 8.44%, Q2: 8.25%. | Source |
| Georgia | 7% (18% on commercial accounts) | O.C.G.A. § 7-4-2; § 7-4-16 | 7% simple is the general legal rate — but § 7-4-16 lets the owner of a commercial account charge 1.5% per month on balances 30+ days past due even with no agreement. | Source |
| Hawaii | 10% | Haw. Rev. Stat. § 478-2 | When no written contract fixes a different rate. | Source |
| Idaho | 12% | Idaho Code § 28-22-104 | "Twelve cents on the hundred by the year" absent an express written contract. Judgments use a treasury-based formula instead. | Source |
| Illinois | 5% | 815 ILCS 205/2 | On instruments of writing, on settlement of account from the day the balance is ascertained, and on money withheld by unreasonable and vexatious delay. | Source |
| Indiana | 8% | Ind. Code § 24-4.6-1-103 | From settlement on unwritten-rate instruments; on accounts, from the date an itemized bill was rendered and payment demanded. | Source |
| Iowa | 5% | Iowa Code § 535.2 | Open accounts start accruing six months after the date of the last item. | Source |
| Kansas | 10% | K.S.A. § 16-201 | From the day of liquidating the account and ascertaining the balance; also covers vexatious delay of settlement. | Source |
| Kentucky | 8% | KRS § 360.010 | Written agreements may exceed it within limits; contracts over $15,000 may set any rate. | Source |
| Louisiana | 7.5% (2026) | La. R.S. 13:4202 | The judicial rate, set each October for the next calendar year (Fed discount + 3.25), doubles as the legal rate for contract debts (C.C. art. 2924). | Source |
| Maine | 1-yr T-bill + 3pp | 14 M.R.S. § 1602-B | Prejudgment interest in civil actions; if the contract or note states a rate, that rate applies. No general out-of-court legal rate. | Source |
| Maryland | 6% | Md. Const. art. III, § 57 | The constitutional legal rate, "unless otherwise provided by the General Assembly". | Source |
| Massachusetts | 12% | Mass. G.L. c. 231, § 6C | In contract actions: the contract rate if established, otherwise 12% from the date of breach or demand. | Source |
| Michigan | 5% | MCL § 438.31 | "$5.00 upon $100.00 for a year"; a written stipulation may go up to 7% (the general usury cap). | Source |
| Minnesota | 6% | Minn. Stat. § 334.01 | "$6 upon $100 for a year" unless a different rate is contracted in writing. | Source |
| Mississippi | 8% | Miss. Code § 75-17-1 | Explicitly the legal rate "on all notes, accounts and contracts", actuarial method. | Source |
| Missouri | 9% | RSMo § 408.020 | On written contracts once due; on accounts once due AND payment has been demanded. | Source |
| Montana | 10% | Mont. Code § 31-1-106 | On instruments of writing, accounts stated, and settlements of account from the date the balance is ascertained. | Source |
| Nebraska | 12% | Neb. Rev. Stat. § 45-104 | On written instruments and settled accounts; unsettled accounts accrue from the billing date if unpaid within 30 days. | Source |
| Nevada | 8.75% (prime + 2) | NRS § 99.040 | Prime rate at Nevada's largest bank plus 2pp, reset each 1 January / 1 July; covers contracts and store accounts. | Source |
| New Hampshire | 5.7% (2026) | N.H. RSA § 336:1 | Set yearly by the state treasurer (26-week T-bill + 2); the same rate serves prejudgment and judgment interest. | Source |
| New Jersey | 6.5% (2026, ≥ $20k) | N.J. Ct. R. 4:42-11 | Court-rule rates (Cash Management Fund based; 4.5% below $20,000). No clean contract-silent statute — prejudgment interest on contract claims is equitable. | Source |
| New Mexico | ≤ 15% | NMSA § 56-8-3 | "Not more than fifteen percent" on money due by contract and on settlement of matured accounts — a ceiling courts apply, not an automatic entitlement. | Source |
| New York | 9% | N.Y. CPLR 5004 | The 2022 amendment (2% + fed funds) applies only to consumer-debt judgments — B2B contract claims remain at 9%. | Source |
| North Carolina | 8% | N.C.G.S. § 24-1 | The legal rate. | Source |
| North Dakota | 6% | N.D.C.C. § 47-14-05 | Unless a different written rate (capped by a T-bill-based formula, minimum 7%) is agreed. | Source |
| Ohio | 7% (2026) | Ohio R.C. § 1343.03(A) | The tax commissioner's § 5703.47 rate (federal short-term rounded + 3, set each October) — applies to book accounts and verbal contracts too. | Source |
| Oklahoma | 6% | 15 O.S. § 266 | In the absence of any contract as to the rate; parties may agree to any lawful rate. | Source |
| Oregon | 9% | ORS § 82.010 | On all moneys after they become due — open accounts bear interest from the date of the last item. | Source |
| Pennsylvania | 6% | 41 P.S. § 202 | The "legal rate" whenever an obligation to pay interest names no rate. | Source |
| Rhode Island | 12% | R.I.G.L. § 6-26-1 | "$12.00 on $100 for one year" in business transactions unless expressly stipulated; civil actions also use 12% (§ 9-21-10). | Source |
| South Carolina | 8.75% | S.C. Code § 34-31-20(A) | On accounts stated and ascertained sums due. Judgments instead use prime + 4, compounded annually (§ 34-31-20(B)). | Source |
| South Dakota | ≤ 12% (Category C) | SDCL § 54-3-4 → § 54-3-16 | Where an obligation to pay interest names no rate, interest runs from the debt's incurrence at up to the Category C rate (12%). | Source |
| Tennessee | ≤ 10% (equitable) | Tenn. Code § 47-14-123 | Prejudgment interest MAY be awarded in equity up to 10% — it is not an automatic entitlement, so treat it as a ceiling, not a right. | Source |
| Texas | 6% | Tex. Fin. Code § 302.002 | On open accounts with no agreed rate — accruing from the 30th day after the amount becomes due. | Source |
| Utah | 10% | Utah Code § 15-1-1 | Absent a contract specifying a different rate. | Source |
| Vermont | 12% | 9 V.S.A. § 41a | Computed by the actuarial method, except as specifically provided by law. | Source |
| Virginia | 6% | Va. Code § 6.2-301 | Implied whenever there is an obligation to pay interest with no express rate; the judgment rate matches (§ 6.2-302). | Source |
| Washington | 12% | RCW § 19.52.010 | On loans/forbearance where no different written rate is agreed. | Source |
| West Virginia | 6.25% (2026) | W.Va. Code § 56-6-31 | Set yearly by the courts (5th Fed District discount + 2, bounded 4–9%); formally the judgment/decree rate. | Source |
| Wisconsin | 5% | Wis. Stat. § 138.04 | The legal rate. | Source |
| Wyoming | 7% | Wyo. Stat. § 40-14-106 | If there is no agreement or provision of law for a different rate. | Source |
Each figure is the statutory rate for contract debts / liquidated accounts when no rate was agreed — not necessarily the post-judgment rate, which several states set differently (noted per row). Georgia deserves a special mention: even with no agreement, O.C.G.A. § 7-4-16 lets a business charge 1.5% per month on commercial accounts 30+ days past due.
Alabama, Alaska, Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Indiana, Maryland, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Pennsylvania, Tennessee, Texas, Wyoming: statute text verified via reputable legal mirrors (the official state site blocks automated access) — confirm against the official code before relying on it in a dispute.
How to read this
Contract first, statute second
The US model is the inverse of the EU's. In the EU, statutory interest and a €40 fee apply automatically to late B2B invoices (see the EU rates by country). In the US, your contract does the heavy lifting: B2B parties can generally agree to a late-fee clause and an interest rate — often well above the table's defaults — and courts enforce reasonable ones. The table matters when the paperwork didn't: no clause, no rate, just an unpaid invoice.
Watch the fine print on when interest starts: Texas starts the clock 30 days after the amount is due, Iowa makes open accounts wait six months from the last item, Oregon runs from the last item on the account, and Missouri requires a demand for payment on accounts. And in a few states the rate you can claim out of court is higher than what a court would later award (Arizona and Alaska both drop to a formula rate in litigation) — one more reason a clear payment-terms clause beats relying on defaults.
Selling into the US from Europe? Put a governing-law state, a late-interest rate, and a late-fee clause in your terms — then the table above becomes your fallback, not your ceiling. For EU customers the late-payment calculator puts a number on statutory interest automatically.
US late-payment interest — common questions
Late fees vs. statutory interest, the missing €40-fee equivalent, and which state's law governs your invoice.
Can I charge a late fee on an invoice in the US?
Only if your contract or terms provide for one. Unlike the EU — where Directive 2011/7/EU gives every business an automatic right to statutory interest plus a €40 recovery fee — US law leaves late fees to the contract. Courts enforce reasonable late-fee clauses between businesses; without a clause, what you fall back on is the state's legal interest rate in the table above, not a fee.
What interest can I charge if the contract says nothing?
The state's statutory legal rate for contract debts — mostly between 5% and 12% per year, fixed by statute in most states (for example New York 9%, California 10%, Texas 6% from 30 days after due). A handful float: Louisiana, New Hampshire, Ohio and West Virginia publish a new rate each year, Florida each quarter, and Delaware and Nevada track the Fed discount or prime rate.
Is there a US equivalent of the EU €40 recovery fee?
No. There is no federal statutory late-payment fee or automatic recovery-cost compensation for B2B invoices. State prompt-payment acts impose interest and deadlines, but almost all of them cover government contracts, not private ones. If you want a fixed late fee or collection-cost recovery on private invoices, it has to be in your contract or terms of service.
Which state's rate applies to my invoice?
Usually the state chosen in your contract's governing-law clause. Without one, courts apply conflict-of-laws rules — typically the state with the closest connection to the transaction. That uncertainty is exactly why standard B2B terms name a governing state and a late-interest rate explicitly: one sentence in your terms replaces this entire table.
Knowing the rate is the fallback. Getting paid on time is the plan.
DueTrail turns overdue invoices into managed cases with reviewable reminders and recorded promises to pay — so invoices get settled before anyone reaches for statutes.