Late Fees on Invoices in Kentucky
What Kentucky contractors and small businesses need to know about charging late fees, interest rates, prompt payment laws, and mechanics lien deadlines.
Max Interest Rate
12% per annum on construction; 8% default otherwise
Small Claims Limit
$2,500
Small Claims Division (District Court)
Mechanics Lien Deadline
6 months from the last day of furnishing labor or materials
Kentucky Prompt Payment Act
Kentucky Prompt Payment Act, KRS § 371.410 et seq.
Kentucky requires payment within 30 days on construction contracts. Late payments accrue interest at 12% per annum plus reasonable attorney fees.
Late fee rules for Kentucky invoices
Kentucky's Prompt Payment Act is strong for construction — 12% interest plus attorney fees. The small claims limit is low, so larger disputes may need circuit court.
Kentucky's default legal interest rate is 8% per annum. The Prompt Payment Act provides 12% per annum on late construction payments. Usury limit is generally 19%.
Important disclaimer
This page provides general information about Kentucky late fee rules. It is not legal advice. Laws change, and your specific situation may have unique factors. For disputes involving significant amounts, consult a licensed attorney in Kentucky.
Demand letters and mechanics liens in Kentucky
Kentucky does not require a demand letter before filing a mechanics lien, but a written demand is recommended.
Mechanics lien deadline: 6 months from the last day of furnishing labor or materials. A lien statement must be filed in the county clerk's office.
Sample late fee clause for Kentucky invoices
“Payment is due within the terms specified above. A late fee of 1.5% per month (12% per annum on construction; 8% default otherwise maximum per Kentucky law) will be applied to all balances remaining unpaid after the due date. Pursuant to Kentucky Revised Statutes § 376.010 et seq. (Mechanics' Liens), the undersigned reserves all rights to pursue collection including but not limited to mechanics lien filing, small claims action (up to $2,500 in Small Claims Division (District Court)), and referral to collections.”
Stop chasing — let InvoiceFlows send the reminders for you
AI-written reminders that escalate from friendly to firm. Works for Kentucky contractors, tradespeople, and small businesses. $9/month, 30-day free trial.
Start Free TrialFrequently asked questions — Kentucky
What is the maximum late fee I can charge on an invoice in Kentucky?▾
In Kentucky, Kentucky's default legal interest rate is 8% per annum. The Prompt Payment Act provides 12% per annum on late construction payments. Usury limit is generally 19%. Always disclose late fee terms in your contract or invoice before work begins.
Does Kentucky have a prompt payment act?▾
Yes. Kentucky requires payment within 30 days on construction contracts. Late payments accrue interest at 12% per annum plus reasonable attorney fees.
What is the small claims court limit in Kentucky?▾
The small claims court limit in Kentucky is $2,500. Claims are filed in Small Claims Division (District Court). You generally do not need an attorney for small claims.
How long do I have to file a mechanics lien in Kentucky?▾
In Kentucky, 6 months from the last day of furnishing labor or materials. A lien statement must be filed in the county clerk's office.
Do I need to send a demand letter before filing a lien in Kentucky?▾
Kentucky does not require a demand letter before filing a mechanics lien, but a written demand is recommended.