§ 20537 Late Payment Interest Charges

• •If a government agency is late paying money it owes, it has to pay extra money called interest.
• •The extra money is 10% of the late payment amount every year until the payment is made.
• •The interest is calculated in a simple way, not a complicated way.
• •The interest money is counted as earnings for the year the late payment is finally received.

A government agency was supposed to pay a company $10,000 for building a park, but they paid 6 months late.

Because the payment was late, the agency has to pay extra money. They have to pay 10% of $10,000 for the time the payment was late.