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The interest rate the state pays on a late payment due to a vendor under the state’s prompt payment law is calculated on an annual basis. The interest calculation is one percentage point higher than the prime rate published in the Wall Street Journal on the first business day of July.
The prime rate was 8.50 percent on July 1, 2024. For fiscal 2025, a 9.50 percent interest rate must be paid on any late payments between Sept. 1, 2024, and Aug. 31, 2025.
State agencies must apply this rate to late payments made from all funds, including local funds. You can view the interest rate in the Uniform Statewide Accounting System (USAS) on the Late Payment Interest Rate (D98) Profile.
Note: When a payment is late during two different fiscal years, only one rate will be used in the interest calculation. The rate used is based on the fiscal year in which the payment becomes late.
| Fiscal Year | Rate |
|---|---|
| 2025 | 9.50 |
| 2024 | 9.25 |
| 2023 | 5.75 |
| 2022 | 4.25 |
| 2021 | 4.25 |
| 2020 | 6.50 |
| 2019 | 6.00 |
| 2018 | 5.25 |
| 2017 | 4.50 |
| 2016 | 4.25 |
| 2015 | 4.25 |
| 2014 | 4.25 |
| 2013 | 4.25 |
| 2012 | 4.25 |
| 2011 | 4.25 |
| 2010 | 4.25 |
| 2009 | 6.00 |
| 2008 | 9.25 |
| 2007 | 9.25 |
| 2006 | 7.25 |
| 2005 | 12.00 |
| Before 2005 | 12.00 |
Texas Government Code Section 2251.025 (b)