The statutory rate
O.C.G.A. 13-11-7(a) sets interest on late Prompt Pay Act payments at 1 percent per month, or a pro rata fraction thereof, on the unpaid balance, beginning the day after the due date.
Traps on the rate and base:
- It is not 1.5 percent per month, and the base is the unpaid balance, not the full contract price.
- It is not 12 percent per month; that confuses the monthly rate with an annualized figure.
- The statute does not use the prime rate.
Notice is required
No interest is due unless the person being charged interest was notified of the provision of this Code section at the time the request for payment was made. Charging interest without that notice is a common error.
- A demand letter sent after the payment went late is too late; notice has to go with the payment request.
- A claim of lien is a separate lien remedy and does not create prompt-pay interest.
- An affidavit of nonpayment relates to lien waivers under 44-14-366, not to interest.
Computing interest
Interest = unpaid balance × 0.01 × months late.
- 40,000 dollars paid 2 months late: 40,000 × 0.01 × 2 = 800 dollars. 400 dollars is only one month; 1,200 dollars uses 1.5 percent; 4,800 dollars charges 12 months.
- 30,000 dollars paid half a month late: 30,000 × 0.01 × ½ = 150 dollars. The pro rata rule means a part month is charged as a fraction, so a full month (300 dollars) is wrong, and 15 dollars misplaces the decimal (0.1 percent).
Accepting payment ends the claim
Under 13-11-7(a), acceptance of a progress payment or the final payment releases all claims for interest on that payment. Acceptance itself is the release; interest does not keep running until a signed release. The 90-day window belongs to lien waiver law, not interest claims, and nothing in the statute doubles the rate for willful delay.