Late Fees on Invoices in Pennsylvania
What Pennsylvania contractors and small businesses need to know about charging late fees, interest rates, prompt payment laws, and mechanics lien deadlines.
Max Interest Rate
1% per month (12% per annum) on construction; 6% default otherwise
Small Claims Limit
$12,000
Magisterial District Court
Mechanics Lien Deadline
6 months from completion for GCs; 4 months for subs
Pennsylvania Prompt Payment Act
Pennsylvania Contractor and Subcontractor Payment Act, 73 P.S. § 501 et seq.
Pennsylvania requires owners to pay contractors within 20 days of an approved application (45 days for first payment). Contractors must pay subs within 14 days.
Late fee rules for Pennsylvania invoices
Pennsylvania's contractor payment act provides strong protections including interest and attorney fees. Contractual late fees must still be reasonable.
Pennsylvania's Contractor Payment Act specifies 1% monthly interest plus attorney fees. The default legal rate for non-construction contracts is 6% per annum.
Important disclaimer
This page provides general information about Pennsylvania 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 Pennsylvania.
Demand letters and mechanics liens in Pennsylvania
Pennsylvania requires a formal Notice of Intent to File Lien at least 30 days before filing. This effectively serves as a demand letter.
Mechanics lien deadline: 6 months from completion for GCs; 4 months for subs. A Notice of Intent to File Lien must be served at least 30 days before filing.
Sample late fee clause for Pennsylvania invoices
“Payment is due within the terms specified above. A late fee of 1.5% per month (1% per month (12% per annum) on construction; 6% default otherwise maximum per Pennsylvania law) will be applied to all balances remaining unpaid after the due date. Pursuant to the Pennsylvania Contractor and Subcontractor Payment Act (73 P.S. § 501), the undersigned reserves all rights to pursue collection including but not limited to mechanics lien filing, small claims action (up to $12,000 in Magisterial District Court), and referral to collections.”
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Start Free TrialFrequently asked questions — Pennsylvania
What is the maximum late fee I can charge on an invoice in Pennsylvania?▾
In Pennsylvania, Pennsylvania's Contractor Payment Act specifies 1% monthly interest plus attorney fees. The default legal rate for non-construction contracts is 6% per annum. Always disclose late fee terms in your contract or invoice before work begins.
Does Pennsylvania have a prompt payment act?▾
Yes. Pennsylvania requires owners to pay contractors within 20 days of an approved application (45 days for first payment). Contractors must pay subs within 14 days.
What is the small claims court limit in Pennsylvania?▾
The small claims court limit in Pennsylvania is $12,000. Claims are filed in Magisterial District Court. You generally do not need an attorney for small claims.
How long do I have to file a mechanics lien in Pennsylvania?▾
In Pennsylvania, 6 months from completion for GCs; 4 months for subs. A Notice of Intent to File Lien must be served at least 30 days before filing.
Do I need to send a demand letter before filing a lien in Pennsylvania?▾
Pennsylvania requires a formal Notice of Intent to File Lien at least 30 days before filing. This effectively serves as a demand letter.