Find your judgment interest rate with 6 state formulas

Unpaid invoice judgment interest: the short answer

The states compared here each set their own formula for the interest that accrues on a judgment. For example, the legal rate of interest on money due on the judgment of any competent court or tribunal in Idaho is the rate of five percent (5%) plus the base rate in effect at the time of entry of the judgment Idaho Legislature. This structure means the final percentage depends on the specific base rate value that is in effect when your judgment is entered.

In Minnesota, the rate varies by the size of the judgment. For a judgment or award over $50,000, other than a judgment or award for or against the state or a political subdivision of the state or a judgment or award in a family court action, the interest rate shall be ten percent per year until paid Office of the Revisor of Statutes, Minnesota. This threshold creates a distinct rate tier for larger unpaid invoices that have resulted in court judgments.

To determine the rate on your specific judgment, identify the state where the judgment was entered and check whether the amount crosses any statutory thresholds. For when interest starts to run, see judgment interest start date rules. In Idaho and Washington, the rate is fixed as of the date of entry, while Minnesota and South Carolina tie it to calendar years.

Key takeaways

• The states compared here each set their own formula for judgment interest.
• According to the Idaho Legislature, the legal rate is 5% plus a base rate determined by the state treasurer.
• The Idaho base rate is set on July 1 of each year using the one-year treasury yield, rounded up to the nearest one-eighth percent.
• This announced rate applies for the succeeding 12 months to all judgments declared during that period.
• Idaho calculates interest and principal payments according to a 365-day year.

The parts of a judgment interest rate

Many judgment rates are built from a foundation number set by the state, while some are fixed percentages, such as Minnesota’s 10% per year for judgments over $50,000. The foundation can be a treasury yield, a prime rate, or a rounded annual figure, depending on the jurisdiction.

Idaho’s foundation is the base rate, which the state treasurer determines on July 1 of each year. It uses the weekly average yield on United States treasury securities adjusted to a constant maturity of one year, then rounds that figure up to the nearest one-eighth percent Idaho Legislature. The rounding direction matters: the rate moves up to the next one-eighth increment, not to the nearest.

South Carolina’s foundation is the prime rate from the Wall Street Journal. The legal rate equals that prime rate plus four percentage points, and it compounds annually South Carolina Legislature. The prime rate used is the one listed in the Journal for each calendar year in which the damages are awarded.

Minnesota’s foundation is a rounded yield. For judgments not covered by the 10% rule, the yield rounded to the nearest one percent, or four percent, whichever is greater, sets the annual interest rate for the succeeding calendar year Office of the Revisor of Statutes, Minnesota. This creates a floor: if the rounded yield would be below four percent, the rate is set at four percent instead.

Each of these foundations feeds into the final judgment rate, but the state’s formula adds its own modifiers—such as a fixed percentage added on top, a compounding method, or a cap—before the interest is applied to the unpaid invoice balance.

Published rates and formulas by state

The states below each set their own formula for the interest rate on a court judgment, so the specific percentage depends on where the judgment was entered. The statutes below show how three jurisdictions define their legal rates, using different base metrics and update schedules.

In Idaho, the legal rate of interest on money due on the judgment of any competent court or tribunal is set at five percent (5%) plus the base rate in effect at the time of entry of the judgment, according to the Idaho Legislature. The legal rate of interest as announced by the treasurer on July 1 of each year shall operate as the rate applying for the succeeding twelve (12) months to all judgments declared during such succeeding twelve (12) month period. The payment of interest and principal on each judgment shall be calculated according to a three hundred sixty-five (365) day year.

South Carolina takes a different approach by tying its rate to a commercial benchmark. The legal rate of interest is equal to the prime rate listed in the Wall Street Journal for each calendar year in which the damages are awarded, plus four percentage points, compounded annually, as stated by the South Carolina Legislature. The South Carolina Supreme Court shall issue an order by January 15 of each year confirming the annual prime rate. In all cases of accounts stated and in all cases wherein any sum or sums of money shall be ascertained and, being due, shall draw interest according to law, the legal interest shall be at the rate of eight and three-fourths percent per year.

Minnesota uses a treasury yield metric to determine its rates, with a specific threshold for larger judgments. For a judgment or award over $50,000, other than a judgment or award for or against the state or a political subdivision of the state or a judgment or award in a family court action, the interest rate shall be ten percent per year until paid, according to the Office of the Revisor of Statutes, Minnesota. For judgments not covered by the 10% rule, the yield, rounded to the nearest one percent, or four percent, whichever is greater, sets the annual interest rate for the succeeding calendar year. On or before the 20th day of December of each year the state court administrator shall determine the rate from the one-year constant maturity treasury yield for the most recent calendar month, reported on a monthly basis in the latest statistical release of the board of governors of the Federal Reserve System. For a judgment or award of $50,000 or less or a judgment or award for or against the state or a political subdivision of the state, regardless of the amount, or a judgment or award in a family court action, except for a child support judgment, regardless of the amount, the interest shall be computed as simple interest.

Judgment interest rate reference table

The table below lists the six state formulas side by side, showing each rate basis, timing, compounding or day-count rule, and the publisher of the statute.

Check which row matches your judgment’s entry state and amount, then note whether the formula uses a fixed percentage, a variable benchmark, or a contractual term.

Work out your own figure: simple, compound and day count

The final interest figure depends on whether the state calculates simple or compound interest and how it counts the days in a year. Idaho calculates the payment of interest and principal on each judgment according to a three hundred sixty-five (365) day year Idaho Legislature. This day count rule sets the denominator when converting the annual rate to a daily rate (annual rate divided by 365).

For Minnesota, the judgment amount determines whether simple interest applies. For a judgment or award of $50,000 or less, the interest shall be computed as simple interest Office of the Revisor of Statutes, Minnesota. Simple interest means the calculation applies the rate only to the original principal amount, not to previously accrued interest.

Michigan uses a different approach by compounding the interest annually. The rate under this subsection shall not exceed 13% per year compounded annually after the date judgment is entered Michigan Legislature. Under subsection (b), the statute sets thirteen percent per year compounded annually for the period between entry of judgment and satisfaction, for time elapsing after 1980 Michigan Legislature. Annual compounding means interest is added to the principal once a year, and subsequent interest calculations include that added amount.

To work out your own figure, first identify whether your state uses simple or compound interest. If your state uses simple interest, multiply the principal by the annual rate and then by the fraction of the year elapsed. If your state uses compound interest, apply the rate at the end of each compounding period and add the result to the principal before calculating the next period.

The day count rule affects how you calculate the fraction of the year. If your state uses a 365-day year, divide the number of days elapsed by 365. If your state uses a different day count, use that number instead. The compounding method determines whether you calculate interest on the original principal only or on the principal plus previously accrued interest.

Write down your judgment’s entry date and the date you expect to satisfy it. Count the days between those dates and divide by your state’s day count rule. Apply the annual rate according to whether your state uses simple or compound interest. This gives you the interest figure to add to your principal. For due date setup, see invoice payment schedules.

What moves the number: amount, contract rate and year

The interest rate on your judgment shifts with the judgment amount, whether a written contract specified a rate, and the specific date the judgment was entered. In Washington, the rate depends on whether the judgment is founded on a written contract that provides for interest at a specified rate, as stated in Washington State Legislature RCW 4.56.110. If such a contract exists and the rate is set forth in the judgment itself, the judgment bears interest at that contract rate. Otherwise, the judgment bears interest from the date of entry at the maximum rate permitted under RCW 19.52.020 on the date of entry.

In North Carolina, the contract rate applies after judgment only if the parties agreed in the contract that the contract rate shall apply after judgment, according to North Carolina General Assembly G.S. 24-5. If that agreement is present, interest on an award in a contract action is at the contract rate after judgment. If the agreement is absent, the interest is at the legal rate.

Next step: open your judgment document today and check whether a specific interest rate is written into it. If the rate is absent, the applicable maximum or legal rate for your state applies.

Related guides: Conflict of interest waivers: 8 proof points · Deposit invoice: 4 steps to split the remaining balance.

FAQ: judgment interest on an unpaid invoice

What is the interest on an unpaid invoice judgment in my state?

The rate depends on the state where the judgment is entered. For example, Idaho Legislature defines the rate as five percent (5%) plus the base rate in effect at the time of entry. In Minnesota, the Office of the Revisor of Statutes, Minnesota specifies a ten percent per year interest rate for judgments over $50,000.

Does the Idaho judgment rate change every year?

Yes, the rate is updated annually. The Idaho Legislature states that the legal rate of interest announced by the treasurer on July 1 of each year applies for the succeeding twelve (12) months. This rate covers all judgments declared during that specific twelve-month period.

How does Minnesota treat judgments over $50,000 differently?

Larger judgments carry a fixed annual percentage. According to the Office of the Revisor of Statutes, Minnesota, a judgment or award over $50,000 carries an interest rate of ten percent per year until paid. This rule excludes judgments for or against the state, political subdivisions, or family court actions.

Can a rate written into my contract replace the legal judgment rate?

It depends on the specific contract language. The North Carolina General Assembly notes that the contract rate applies after judgment only if the parties agreed in the contract that it shall apply. Otherwise, the legal rate applies. Washington requires the rate to be set forth in the judgment.

Is judgment interest simple or compounded?

The method varies by state and judgment amount. Michigan compounds annually, with a rate cap of 13% per year after the date judgment is entered, as noted by the Michigan Legislature. Minnesota uses simple interest for judgments of $50,000 or less.