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Construction Claim Interest & Liquidated Damages Calculator

On a claim that has been outstanding for two or three years, interest is not a rounding error. At a statutory rate in the high single digits it can add a fifth to the recovery. It is frequently left out of a settlement position entirely because nobody computed it.

This calculator accrues prejudgment and post-judgment interest from the accrual date you specify, at the rate and compounding convention you specify and nets the result against liquidated damages assessed in the other direction. The output is a settlement range rather than a single number, because the two sides of that netting rarely have the same probability.

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Claim Interest and Liquidated Damages: Total Claim Value

Accrues pre/post-judgment statutory interest and nets liquidated damages against extended general conditions claims to establish a settlement range. Choose the governing state to see its statutory rate. The rate and compounding used are whatever you enter. Check your state's interest rate ↓

Statutory Interest LD vs. Extended GC Offset

Step 1: Has the Claim Gone to Judgment?

What it means: Interest runs in two stages. Before judgment, prejudgment interest runs at the rate set by statute or by your contract. Once a court enters judgment, prejudgment interest stops and postjudgment interest runs on the judgment, usually at a different rate. What to choose: “No” for an unpaid invoice, a pending claim or a claim in negotiation or litigation. “Yes” only once a judgment has actually been entered; Step 3 then asks for the postjudgment rate and days.
Step 1Judgment or not
Step 2The four numbers
Step 3Refine

Step 2. The four numbers we need

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Example figures. Edit them or clear them.

What it means: The unpaid dollar amount that is accruing interest: an unpaid pay application, a retainage balance, or a court/arbitration judgment amount. What to enter: The exact unpaid balance as of the date interest begins accruing.
What it means: The state whose law governs the claim sets the statutory interest rate, how it compounds and when it starts to run. What to enter: Usually the state where the project is located or the state named in the contract. Choosing a state does not change your rate on its own: it shows the rate on record so you can use it or enter your contract rate instead.
What it means: The interest rate that applies by law or contract to this unpaid balance, expressed as an annual percentage. What to enter: Usually set by state statute (prejudgment/postjudgment interest rate) or by your contract's late-payment clause; check your state's prompt payment act or your contract terms for the exact rate.
What it means: The number of calendar days interest has been accruing. What to enter: Count from the date payment was due through today or another cutoff date you choose. If judgment has been entered, stop at the date of judgment: interest after that runs at the postjudgment rate in Step 3.

Step 3. Refine this estimate. 0 fields, all with defaults applied. These change the result significantly.

How Interest Accrues

What it means: How the interest compounds. "Simple" calculates interest once on the original principal only. "Compound" calculates interest on principal plus previously accrued interest, recalculated either monthly or annually. What to enter: Check your state's statute or contract language; many states use simple interest for prejudgment amounts and only allow compounding post-judgment.

Postjudgment interest applies only once judgment has been entered. Answer “Yes” in Step 1 to add it.

Liquidated Damages vs. Extended GC Offset

What it means: The daily liquidated damages rate written into your contract that the owner is assessing against you for late completion (a fixed dollar figure specified in the contract, not something you calculate). What to enter: Copy the exact $/day figure from your contract's liquidated damages clause.
What it means: The number of days of delay the owner has actually assessed liquidated damages for. What to enter: Check the owner's formal LD assessment notice or withheld-payment documentation; this may differ from your own delay day count.
What it means: Your own daily extended general conditions rate, the same figure used in the Delay & Overhead calculator, is what it actually costs you per day to be delayed. What to enter: Reuse your Daily Field Overhead Rate from the first calculator, or recalculate from your general conditions budget.
What it means: The number of delay days you are claiming as excusable/compensable and attributing to the owner. What to enter: Use your own delay analysis's claimed day count, which you'll net against the owner's LD assessment above.
Interest Accrued prejudgment plus any postjudgment
$0
Total Claim Value
$0
Net LD/GC Offset added to the total only if positive
$0

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Methodology:
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How statutory interest and liquidated damages offset are calculated

Interest on an unpaid construction balance has three variables and each is a separate argument: the rate, the accrual period and whether interest compounds. Simple interest is principal multiplied by rate multiplied by days over 365. Compound interest applies the rate over n periods per year across the elapsed term.

Prejudgment and postjudgment interest are distinct legs. Most states set different statutory rates for the two and they run over different periods. Prejudgment interest stops at entry of judgment; postjudgment interest then runs on the judgment amount, which includes the prejudgment interest merged into it. Treating them as one rate over one period understates or overstates the total depending on which rate is higher.

The accrual start date is the most contested element in practice. Depending on the jurisdiction and the claim, it may run from the date the sum became due, from written demand, or from filing. Dated demand letters and a clean payment ledger fix that date; without them the period is argued rather than proven.

Liquidated damages assessed by the owner are netted against the contractor's extended general conditions claim. The offset is applied to the total only when it is positive, because a negative net is an owner recovery rather than a reduction of the contractor's claim. The two are pleaded differently.

How to cite this calculation in a brief or demand letter

A statutory interest claim is supported by:

  • The governing state's prejudgment and postjudgment interest statutes, rates and accrual rules, cited on the matching state-rules page
  • The contract's payment terms and any interest provision, a contractual rate may displace the statutory one
  • Any applicable prompt-payment act, construction-specific statutes often set their own rate and timeline

Confirm the current rate for the year the claim accrued. Several states reset their statutory rate on a published schedule, so a rate that was right last year may not be right now.

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Rate, accrual date and compounding all vary by state

Three inputs decide the interest figure and all three are state-specific. The rate may be a fixed statutory percentage, a floating rate tied to a federal benchmark that resets on a schedule, or a contract rate where one is enforceable. The accrual date may run from breach, from demand, from the date the sum became liquidated, or from filing. Compounding is simple in most states and periodic in a few.

The calculator applies whatever you enter. The 50-state + DC interest reference gives the current statutory rate, accrual rule and citation for each state, with a link to the official source, so the inputs can be verified rather than assumed.

Netting liquidated damages

Where an owner has assessed liquidated damages for late completion and the contractor is claiming compensable delay, the two are usually resolved together. Setting them out as separate accruals that are then netted, rather than as one blended number, makes the settlement arithmetic legible to the other side, which is generally the point of producing it at all.

Before you rely on the figure

Statutory interest rates change and floating rates reset on a published schedule. Verify the rate against the official source for the current period before filing anything. The claim interest checklist covers the records that establish the accrual date, which is contested more often than the rate is.

Frequently asked questions

What is prejudgment interest?

Interest that accrues on a claim between the date it arose and the date judgment is entered, compensating the claimant for being kept out of money that was owed. Post-judgment interest then runs from judgment until payment, usually at a different statutory rate.

From what date does interest start running?

It depends on the state and on the nature of the claim. Common accrual triggers are the date of breach, the date of a written demand and the date the amount became liquidated or readily ascertainable. On a construction claim the last of those is often disputed, because the amount is not fixed until the claim is quantified.

Is interest simple or compound?

Most U.S. states apply simple interest to prejudgment awards by statute. A minority allow periodic compounding and a contract rate may specify compounding where the contract rate is enforceable. The calculator supports both conventions.

Can liquidated damages and delay damages offset each other?

In practice they are frequently netted in settlement, but whether they legally offset depends on the contract and on entitlement to the underlying delay claim. The calculator shows both accruals separately and the net position, so the components stay visible.