The Interest Clock: What an Unpaid Construction Invoice Earns in Every State (2026)
✓ Verified against state statutes · Reviewed November 2026 · By Michael Evan — Founder · 50 states · 799 rules
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Key Findings of the 2026 Prejudgment Interest Survey
We read the legal-rate and prejudgment interest statutes of all 50 states, and each state's mechanics lien act, to measure what an unpaid construction invoice earns while it waits and whether the lien itself can carry that interest. A $100,000 balance unpaid for two years earns $10,000 at the 5% rate in Illinois, Iowa, Michigan, or Wisconsin and $24,000 at the 12% rate in Idaho, Massachusetts, Nebraska, Rhode Island, Vermont, or Washington, a $14,000 difference on the same invoice. Two states pay lien claimants more than their general rate: Illinois adds 10% a year from the date due under 770 ILCS 60/1(a) against a 5% legal rate, and Colorado gives lien claimants the contract rate or 12% under C.R.S. 38-22-101(5) against an 8% general rate. Only nine lien statutes expressly add interest to the lien; 25 are silent, six mention interest only on the bond or deposit that replaces a lien, and North Carolina limits the lien judgment to the principal amount claimed. Nine states let the rate float: Florida's quarterly rate fell from 8.44% in January 2026 to 7.87% in October, and Ohio's dropped from 8% in 2025 to 7% in 2026.
The Fixed-Rate States, Ranked
Thirty-seven states set a fixed statutory rate on a contract debt when the contract names none. 12%: Idaho (Idaho Code 28-22-104), Massachusetts (G.L. c. 231, 6C), Nebraska (Neb. Rev. Stat. 45-104, liquidated claims), Rhode Island (R.I. Gen. Laws 9-21-10, added by the clerk), Vermont (9 V.S.A. 41a), and Washington (RCW 19.52.010). 10%: Arizona (A.R.S. 44-1201, liquidated claims), California (Civ. Code 3289(b)), Hawaii (HRS 478-2), Kansas (K.S.A. 16-201), Montana (MCA 31-1-106), New Hampshire (RSA 336:1, business transactions), South Dakota (SDCL 21-1-13.1), and Utah (Utah Code 15-1-1). 9%: Missouri (RSMo 408.020), New York (CPLR 5001, 5004), and Oregon (ORS 82.010). 8.75%: South Carolina (S.C. Code 34-31-20). 8%: Colorado (C.R.S. 5-12-102, compounded annually), Indiana (Ind. Code 24-4.6-1-102), Kentucky (KRS 360.010), Mississippi (Miss. Code 75-17-1), and North Carolina (N.C.G.S. 24-1). 7%: Georgia (O.C.G.A. 7-4-2) and Wyoming (Wyo. Stat. 40-14-106). 6%: Alabama (Ala. Code 8-8-1), Arkansas, Maryland (Md. Const. art. III, 57), Minnesota (Minn. Stat. 334.01), North Dakota (N.D.C.C. 47-14-05), Oklahoma (15 O.S. 266), Pennsylvania (41 P.S. 202), and Virginia (Va. Code 6.2-301). 5%: Illinois (815 ILCS 205/2), Iowa (Iowa Code 535.2), Michigan (MCL 438.31, before suit), and Wisconsin (Wis. Stat. 138.04). The median is 8%. On a $250,000 claim held for three years, the gap between Wisconsin's 5% and Vermont's 12% is $52,500.
Floating and Discretionary Rates
Nine states tie prejudgment interest to a market index. Florida's Chief Financial Officer sets the rate quarterly under Fla. Stat. 55.03: 8.44% in January 2026, 8.25% in April, 8.06% in July, and 7.87% in October. Ohio uses the federal short-term rate plus 3 points under R.C. 1343.03(A), 7% in 2026. Louisiana uses the Federal Reserve discount rate plus 3.25 points under R.S. 13:4202, 7.50% in 2026. Alaska uses the discount rate plus 3 points (AS 09.30.070), Delaware the discount rate plus 5 points (6 Del. C. 2301), Maine the one-year Treasury yield plus 3 points (14 M.R.S. 1602-B), Nevada prime plus 2 points (NRS 99.040), West Virginia the discount rate plus 2 points with a 4% floor and 9% cap (W. Va. Code 56-6-31), and Texas the post-judgment rate tracking prime between 5% and 15% (Tex. Fin. Code 304.003). Four states leave the rate to the court: Connecticut and Tennessee allow up to 10%, New Mexico up to 15% on money due by contract, and New Jersey uses its Court Rule 4:42-11 rates as a guide.
The Lien Premium and Lien-Specific Interest
Nine mechanics lien statutes expressly carry interest. Illinois adds 10% a year from the date due (770 ILCS 60/1(a), repeated for subcontractors in section 21). Colorado gives lien claimants the contract rate or 12% (C.R.S. 38-22-101(5)). South Dakota pays 10% on statutory liens from the date the lien is filed (SDCL 54-3-5.1). Nevada's court shall award interest at the contract rate or prime plus 4 points (NRS 108.237). Minnesota runs the legal rate until 30 days after last work and the judgment rate after that (Minn. Stat. 514.135). Alabama (Ala. Code 35-11-224), Kentucky (KRS 376.010), Louisiana (La. R.S. 9:4803), and Virginia (the Va. Code 43-5 memorandum form) bring interest into the lien at the ordinary rate. Michigan allows contract interest on residential subcontractor and supplier liens, capped at 90 days after recording (MCL 570.1107(7)), and Florida allows finance charges for lienors not in privity (Fla. Stat. 713.06(1)).
Silent Statutes, Bonded Liens, and the North Carolina Exception
Twenty-five lien acts are silent on interest. In those states the claimant records the principal and seeks interest in the foreclosure or contract action under the general statute; adding unauthorized interest to the lien risks an overstatement fight. Six states mention interest only on the security that replaces a lien: Arizona (A.R.S. 33-1004), Arkansas (Ark. Code 18-44-118), Connecticut (Conn. Gen. Stat. 49-37), Delaware (25 Del. C. 2719), Idaho (7% under Idaho Code 45-522(5)), and West Virginia (W. Va. Code 38-2-36). Florida requires a transfer bond or deposit equal to the lien plus three years' interest (Fla. Stat. 713.24). New York and Oklahoma imply interest through their discharge provisions. North Carolina limits a judgment enforcing the lien to the principal amount stated in the claim of lien (N.C.G.S. 44A-13(b)); 8% interest remains available on the contract claim.
When a Different Statute Pays More
The legal rate is the floor. A signed contract rate usually controls. A prompt payment statute usually pays more where it applies: 1.5% a month under Texas Property Code chapter 28, 18% a year under Ohio R.C. 4113.61, and 10% under the Illinois Contractor Prompt Payment Act. Most states require the claim to be liquidated before interest runs, so itemized invoices, approved pay applications, and signed change orders matter. In demand-trigger states such as Alaska, Maine, Massachusetts, and Missouri for accounts, a written demand starts the clock. Interest on a lost lien is interest on an unsecured claim, so the preliminary notice, lien recording, and enforcement deadlines tracked by the Mechanics Lien Management State System come first.
Methodology
For each state we identified the statute setting interest on money due under a contract when the contract names no rate, the rule on when prejudgment interest begins, and the mechanics lien act's treatment of interest, as current in November 2026, using official legislature sites and the Midpage legal database. Floating-rate values come from official notices from the Florida Chief Financial Officer, the Ohio Department of Taxation, and Louisiana rate bulletins. Arkansas, Mississippi, Pennsylvania, and Tennessee rest on unofficial compilations; Georgia's and New Hampshire's lien chapters were not read in full; Minnesota's governing rate is unsettled; and Texas contract prejudgment interest rests on case law. Silent means no interest provision was found in the lien chapter, not that interest is barred.
Frequently Asked Questions
What is the prejudgment interest rate on an unpaid construction invoice?
It depends on the state, and on whether your contract sets a rate. If the contract names an interest rate, that rate usually controls. If it does not, each state's legal-rate statute fills the gap. Among the 37 states with a fixed statutory rate, the range is 5% to 12% a year and the median is 8%. Idaho, Massachusetts, Nebraska, Rhode Island, Vermont, and Washington are at 12%. Illinois, Iowa, Michigan (before suit), and Wisconsin are at 5%. Nine states, including Florida, Ohio, Louisiana, and Nevada, use a floating rate tied to a federal index.
Can I add interest to the amount of my mechanics lien?
Only nine lien statutes say so expressly: Alabama (Ala. Code 35-11-224), Colorado (C.R.S. 38-22-101(5), contract rate or 12%), Illinois (770 ILCS 60/1(a), 10% from the date due), Kentucky (KRS 376.010), Louisiana (La. R.S. 9:4803), Minnesota (Minn. Stat. 514.135), Nevada (NRS 108.237), South Dakota (SDCL 54-3-5.1, 10% from filing), and Virginia (the Va. Code 43-5 memorandum form). Michigan and Florida allow it in narrow cases. North Carolina limits the lien judgment to the principal stated in the claim (N.C.G.S. 44A-13(b)). In most other states the statute is silent, and interest is claimed in the lawsuit rather than written into the lien.
When does prejudgment interest start running?
Most statutes start interest when the money became due. California runs it from the day the right to a sum certain vests (Civ. Code 3287), Missouri from when a written contract amount is due (RSMo 408.020), and Oregon and Montana when the money becomes due. Some states wait for a demand or a lawsuit: Alaska runs it from the earlier of service or written notice of the claim (AS 09.30.070), Maine from service of a sworn notice of claim or filing of the complaint (14 M.R.S. 1602-B), and Massachusetts from breach or demand, or from filing if neither is established (G.L. c. 231, 6C). Most states also require the amount to be liquidated, meaning fixed or easy to calculate.
How much interest does a $100,000 unpaid invoice earn?
At simple interest, a $100,000 balance unpaid for two years earns $10,000 at Illinois's 5% legal rate and $24,000 at the 12% rate in Idaho, Massachusetts, Nebraska, Rhode Island, Vermont, or Washington, a $14,000 difference on the same invoice. In Illinois the lien statute itself raises the rate to 10% for a lien claimant, so the same claim enforced as a mechanics lien earns about $20,000 over two years. Colorado compounds its 8% general rate annually and gives lien claimants 12%.
Is prejudgment interest the same as prompt payment interest?
No. A prompt payment statute sets its own, usually higher, rate for late payments that fall inside it, such as 1.5% a month under Texas Property Code chapter 28 or 18% a year under Ohio R.C. 4113.61. The legal-rate statutes in this survey are the fallback that applies to any contract debt when no contract rate and no prompt payment statute governs. Many contractors have both claims available and should check which one pays more.