Everything freelancers and small businesses need to know about charging late fees, interest rates, and collecting overdue invoices in Alaska.
This information is provided for general educational purposes only and does not constitute legal advice. Laws change frequently. Consult a licensed attorney in Alaska for advice on your specific situation. Last reviewed: 2026.
Usury laws cap the maximum interest rate that can be charged on overdue payments in Alaska.
10.5% per annum
Alaska sets the maximum legal interest rate at 10.5% per annum under AS § 45.45.010. This rate applies when no specific rate has been agreed upon by the parties. For judgments, the rate is 3.5% above the 12th Federal Reserve District rate.
Business loans exceeding $25,000 are exempt from the general usury cap. This allows commercial lenders and businesses to negotiate market-rate terms on larger transactions.
Understanding what you can and cannot charge for late payments in Alaska.
Alaska does not have specific late fee statutes for commercial invoices. Late fees are governed by general contract law and must be agreed upon by the parties. Fees that function as penalties may be unenforceable.
No statutory cap; must be contractually agreed upon and reasonable.
Courts apply standard contract law principles. A late fee must be a reasonable pre-estimate of damages, not a penalty. The burden is on the party challenging the fee to show unreasonableness.
Alaska Prior Payment Act sets deadlines and penalties for late payments in Alaska.
30 days after receipt of a proper invoice for state contracts.
Interest at 1.5% per month on late payments from government agencies.
Alaska requires state agencies to pay contractors within 30 days of receiving a proper invoice. The law covers public construction projects and government procurement contracts. Contractors who are not paid timely can recover interest and may have additional remedies.
Certain industries in Alaska have additional rules around payment timelines, liens, and collection procedures.
Construction: Alaska's mechanics' lien statute (AS § 34.35.050) requires filing within 120 days of completion. A notice of right to lien must be given within 15 days of first furnishing labor or materials.
Government contracts: Alaska state agencies must pay within 30 days. Late payments accrue interest at 1.5% per month, providing strong incentive for timely government payments.
Oil and gas: Alaska has specific payment provisions for oil and gas industry contractors, given the industry's significance to the state economy.
Use this compliant wording on your invoices to clearly communicate your late fee policy in accordance with Alaska law.
Payment is due within 30 days of invoice date. A late fee of 1.5% per month (18% per annum) will be applied to all invoices unpaid after the due date, consistent with Alaska law (AS § 45.45.010). This fee represents a reasonable estimate of administrative costs incurred due to late payment.
This wording works because it clearly states the rate, when it applies, and references Alaska legal standards. Always ensure your stated rate complies with Alaska's usury limits.
Practical tips for invoicing within Alaska's legal framework.
Before you can charge a late fee in Alaska, your client needs to have agreed to the terms. Include your late fee clause directly on your invoice and in your contract.
Alaska caps interest rates at 10.5% (statutory). Charging above this limit can void your right to collect interest entirely and may expose you to penalties.
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Compare Alaska's rules with neighboring and commonly referenced states.
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