Indiana prompt payment

Who and what this applies to

Public-agency payment interest under Indiana Code chapter 5-17-5, as published by the state.

The rules

• For covered proper claims, payment is timely if made by the contractual due date or within 35 days after receipt of the goods/services or proper claim, whichever is later. Section 5-17-5-1 separately permits qualifying local-board payments within 35 days after the first board meeting held at least ten days after receipt. Source
• Late amounts bear 1% monthly interest under the chapter. Exceptions include interagency payments, employee reimbursements, timely identified good-faith disputes and specified older or federally funded obligations; qualifying INDOT partial payments of $500 or less also have an exception. Source

Primary sources

• Ind. Code §§5-17-5-1, -3, -4; state published Prompt Payment PDF

Sources reviewed 2026-09-30. This guide covers the projects and rules stated above.

Back to Indiana contractor law · Prompt Payment topic guide.