Late fees and interest in South Carolina

The legal rate on accounts stated — 8.75% a year

South Carolina sets a default. In all cases of accounts stated, and wherever a sum due draws interest by law, the legal rate is eight and three-fourths percent per annum.

An account stated is a balance the customer has seen and not disputed. Send the invoice, let it stand uncontested, and the balance is on the footing of an account stated with interest at the legal rate attached to it.

That rate is the floor you fall back on, not the ceiling you are owed. A contract can set a different number, agreed before the work, and on private construction jobs the parties can even contract around the statutory rate, provided the waiver is done properly. The mechanics of the construction rate follow below.

8.75% per annumIn all cases of accounts stated, and wherever any sum due draws interest according to South Carolina law, the legal interest rate is eight and three-fourths percent per annum. — South Carolina Code of Laws, Title 34, Chapter 31, retrieved 2026-09-29

Judgment interest — prime plus four, compounded

Once you win, the rate changes. A money decree or judgment entered in a South Carolina court draws interest equal to the Wall Street Journal prime rate for the calendar year in which the damages are awarded, plus four percentage points, compounded annually.

The Supreme Court confirms the annual prime rate by an order issued each year by January 15, so the number is published and checkable rather than something you have to argue about. The rule applies to judgments entered on or after July 1, 2005.

The practical shape of this: pre-judgment, your claim rides on the invoice rate or the legal rate; post-judgment, it rides on prime plus four. If the prime rate is high when you win, the judgment earns more than the account did, which is one more reason not to let a claim sit.

A South Carolina judgment draws interest at the Wall Street Journal prime rate for the year of the award plus four points, compounded annually; the Supreme Court confirms the rate each January. — South Carolina Code of Laws, Title 34, Chapter 31, retrieved 2026-09-29

Construction — one percent a month, if the notice was sent

A construction payment delayed past its statutory deadline draws real interest: one percent a month, or a pro rata fraction of it, on the unpaid balance, starting on the due date.

An owner owes a contractor the undisputed amount of a pay request within 21 days of receiving it, and a contractor owes each subcontractor within 7 days of receiving each periodic or final payment. Past those points the monthly rate starts.

It is conditional, and the condition is cheap. No interest is due unless the person being charged was notified of the statute at the time the payment request was made. A one-line citation of the section on every construction invoice is what switches the rate on. The prompt payment page covers the clocks; the invoice terms guide covers the wording.

1% a monthA payment delayed more than 21 days to a South Carolina contractor, or more than 7 days to a subcontractor, draws one percent a month, but only if the payer was notified of the statute at the request. — South Carolina Code of Laws, Title 29, Chapter 6, retrieved 2026-09-29

A flat late fee is a rate in disguise, so write it as one

A flat "late fee" of $50 on a $400 invoice is a 12.5 percent charge on the balance; on a $4,000 invoice the same $50 is 1.25 percent. A court reads the fee against the balance it is charged on, which is why a stated rate reads cleaner than a flat number.

Write it as a rate, on the days past due, and put it in the contract rather than only on the invoice. South Carolina does not publish a small-business late-fee cap the way it publishes the legal rate, so the honest framing is: your agreed rate, stated plainly, applies as contract terms, and the statutory rates are what carry you when the contract is silent.

On private construction projects only, the parties can agree to different interest rates and payment periods than the statutory ones, but the agreement must waive sections 29-6-30 and 29-6-50 specifically, by section number, in conspicuous bold-faced or underlined type. A vague "parties may agree otherwise" clause does not do that work, and a wilful breach of the agreed time of payment drops the parties back to the statutory rate.

On private construction projects, different rates and payment periods are valid only if sections 29-6-30 and 29-6-50 are waived by section number in conspicuous bold-faced or underlined type. — South Carolina Code of Laws, Title 29, Chapter 6, retrieved 2026-09-29

When the residential job is outside the whole chapter

The construction rate has a boundary, and it is drawn by project type, not by how late the payment is.

The prompt payment chapter does not apply to residential homebuilders, to improvements intended for residential purposes consisting of sixteen or fewer residential units, or to private persons or entities whose improvements are not financed by a nonowner.

An electrician on a custom home for its owner-builder, or a landscaper on a private yard, may be outside the chapter entirely. The invoice rate and the legal rate on an account stated are then what you lean on. The table below collects the rates side by side, with the trigger each one needs.

16 unitsThe prompt payment chapter does not apply to residential homebuilders, residential improvements of sixteen or fewer units, or private owners whose improvements are not financed by a nonowner. — South Carolina Code of Laws, Title 29, Chapter 6, retrieved 2026-09-29

Put the rate to work in the demand letter

Interest is at its most useful before the courthouse, in the demand letter, where the number makes settlement arithmetic obvious. A $6,000 invoice three months late draws about $131 at the legal rate; on construction with the notice sent, $180.

The letter states the balance, the rate, the days, and a total. A customer can argue a bill; it is harder to argue a scheduled table of what the next 30 days adds.

The demand letter that a returned check forces, with certified mail and a 30-day window before treble damages, is its own procedure and is covered in what to do when a check bounces. For a check-free debt, the past-due checklist is the day-by-day order of moves.

30 daysA person who fails to satisfy a dishonored check within 30 days after written demand by certified mail is liable for the amount owing plus damages of the lesser of $500 or three times it. — South Carolina Code of Laws, Title 34, Chapter 11, retrieved 2026-09-29

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