Prompt Payment Interest Rate Notice

Regs.gov: Fiscal Service

Published January 1st, 2026

Detected March 15th, 2026

Summary

The Bureau of the Fiscal Service has issued a notice establishing the prompt payment interest rate for the period of January 1, 2026, to June 30, 2026. The applicable rate is 4 1/8 percent per annum, as determined by the Secretary of the Treasury.

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What changed

The Bureau of the Fiscal Service has published a notice establishing the prompt payment interest rate for government agencies. For the period beginning January 1, 2026, and ending June 30, 2026, the interest rate applicable to late payments to businesses will be 4 1/8 percent per annum. This rate is determined by the Secretary of the Treasury under the Contract Disputes Act and the Prompt Payment Act.

Government agencies are required to pay this interest penalty on late payments to business concerns. The notice serves as a formal notification of the rate, and agencies should ensure their systems and processes are prepared to apply this rate for obligations accrued during the specified period. While no specific compliance deadline is mentioned beyond the effective date of the rate, agencies must pay the penalty regardless of whether the business concern requests it.

What to do next

Ensure systems are updated to apply the 4 1/8% prompt payment interest rate for obligations accrued between January 1, 2026, and June 30, 2026.
Review agency payment processes to ensure timely payments and accurate calculation of interest penalties for late payments.

Source document (simplified)

Content

ACTION:

Notice of prompt payment interest rate; Contract Disputes Act.

SUMMARY:

For the period beginning January 1, 2026, and ending on June 30, 2026, the prompt payment interest rate is 4
1/8
per centum per annum.

DATES:

Applicable January 1, 2026, to June 30, 2026.

ADDRESSES:

Comments or inquiries may be mailed to: Alternative Payments Division, Bureau of the Fiscal Service, 801 9th Street NW, Washington,
DC 20220. Comments or inquiries may also be emailed to PromptPayment@fiscal.treasury.gov.

FOR FURTHER INFORMATION CONTACT:

Pavita Murthi, Alternative Payments Division, (202) 874-5303; or Ashlee Adams, Senior Counsel, Office of the Chief Counsel,
(304) 480-8692.

SUPPLEMENTARY INFORMATION:

An agency that has acquired property or service from a business concern and has failed to pay for the complete delivery of
property or service by the required payment date shall pay the business concern an interest penalty. 31 U.S.C. 3902(a). The
Contract Disputes Act of 1978, sec. 12, Public Law 95-563, 92 Stat. 2389, and the Prompt Payment Act, 31 U.S.C. 3902(a), provide
for the calculation of interest due on claims at the rate established by the Secretary of the Treasury.

The Secretary of the Treasury has the authority to specify the rate by which the interest shall be computed for interest payments
under section 12 of the Contract Disputes Act of 1978 and under the Prompt Payment Act. Under the Prompt Payment Act, if an
interest penalty is owed to a business concern, the penalty shall be paid regardless of whether the business concern requested
payment of such penalty. 31 U.S.C. 3902(c)(1). Agencies must pay the interest penalty calculated with the interest rate, which
is in effect at the time the agency accrues the obligation to pay a late payment interest penalty. 31 U.S.C. 3902(a). “The
interest penalty shall be paid for the period beginning on the day after the required payment date and ending on the date
on which payment is made.” 31 U.S.C. 3902(b).

Therefore, notice is given that the Secretary of the Treasury has determined that the rate of interest applicable for the
period beginning January 1, 2026, and ending on June 30, 2026, is 4
1/8
per centum per annum.

Timothy E. Gribben, Commissioner, Bureau of the Fiscal Service. [FR Doc. 2026-02176 Filed 2-2-26; 8:45 am] BILLING CODE 4810-AS-P