Everything freelancers and small businesses need to know about charging late fees, interest rates, and collecting overdue invoices in Georgia.
This information is provided for general educational purposes only and does not constitute legal advice. Laws change frequently. Consult a licensed attorney in Georgia for advice on your specific situation. Last reviewed: 2026.
Usury laws cap the maximum interest rate that can be charged on overdue payments in Georgia.
5% default / 7% on written contracts; commercial loans up to 60%
Georgia sets a low default interest rate of 5% per annum and 7% for written contracts (O.C.G.A. § 7-4-2). However, for commercial loans and lines of credit, parties may agree to rates up to 5% per month (60% per annum). This creates a wide gap between consumer and commercial rates.
Commercial loans of $3,000 or more have significant exemptions, allowing rates up to 5% per month (60% per annum). This makes Georgia very flexible for business-to-business transactions despite the seemingly low default rates.
Understanding what you can and cannot charge for late payments in Georgia.
Georgia allows late fees on commercial invoices when agreed upon in the contract. For commercial transactions, the generous 60% commercial rate cap provides significant flexibility for structuring late fees. Fees must still be reasonable and contractually agreed upon.
Must comply with applicable interest rate limits. For commercial transactions, the effective cap is very high (up to 60% per annum).
Georgia courts apply a standard liquidated damages analysis. For commercial contracts with sophisticated parties, courts give more deference to agreed-upon terms.
Georgia Prompt Pay Act sets deadlines and penalties for late payments in Georgia.
30 days for government contracts; 10 days for construction subcontractor payments after prime receives payment.
Interest at 1% per month on late payments plus attorney's fees.
Georgia's Prompt Pay Act (O.C.G.A. § 13-11-1 et seq.) covers both government and private construction contracts. Government entities must pay within 30 days. In construction, contractors must pay subcontractors within 10 days of receiving payment. The Act includes attorney's fee provisions for successful enforcement actions.
Certain industries in Georgia have additional rules around payment timelines, liens, and collection procedures.
Construction: Georgia's mechanics' lien law (O.C.G.A. § 44-14-361) requires filing within 90 days of completing work. A preliminary notice (Notice to Contractor) must be filed within 30 days of starting work for subcontractors on residential projects.
Government contracts: Georgia's Prompt Pay Act applies to both government and private construction with strong protections including attorney's fee recovery for successful claimants.
Agriculture: Georgia has specific provisions for agricultural contracts and commodity transactions that may affect payment terms in the farming and agribusiness sectors.
Use this compliant wording on your invoices to clearly communicate your late fee policy in accordance with Georgia law.
Payment is due within 30 days of invoice date. Invoices unpaid after the due date will accrue a late fee of 1.5% per month (18% per annum), as permitted for commercial transactions under Georgia law (O.C.G.A. § 7-4-2). This fee is agreed upon as reasonable liquidated damages for the cost of administering overdue accounts.
This wording works because it clearly states the rate, when it applies, and references Georgia legal standards. Always ensure your stated rate complies with Georgia's usury limits.
Practical tips for invoicing within Georgia's legal framework.
Before you can charge a late fee in Georgia, your client needs to have agreed to the terms. Include your late fee clause directly on your invoice and in your contract.
Georgia caps interest rates at 5% (default) / 7% (written). Charging above this limit can void your right to collect interest entirely and may expose you to penalties.
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Compare Georgia's rules with neighboring and commonly referenced states.
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