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How is interest calculated?
Authorised Nominating Authority
IMPORTANT: AMENDED ACT
This page is for payment claims or performance security claims made on or after 15 April 2026. If your payment claim or adjudication application was made on or before 14 April 2026 please CLICK HERE - the previous version of the Act applies.
This page is for payment claims or performance security claims made on or after 15 April 2026. If your payment claim or adjudication application was made on or before 14 April 2026 please CLICK HERE - the previous version of the Act applies.
How is interest calculated?
Interest must be calculated at the rate determined by the Adjudicator in the Adjudication Determination. Interest is calculated on the Adjudicated Amount that has not yet been paid/released from the due date (as determined by the Adjudicator) to the date of payment.
The interest rate determined by the Adjudicator does not apply to adjudicator fees.
The formula which may be used to calculate simple interest payable is as follows:
| Formula | ||||||||
| Adjudicated Amount (incl GST) | x | Number of days since due date for payment | ÷ | 365* | x | Interest Rate | = | Interest Due |
| Example | ||||||||
| $110,000 | x | 31 | ÷ | 365 | x | 10% | = | $934.25 |
*366 for leap year calculations.
What is the Penalty Interest Rates Act?
The reference to the rate of interest under section 2 of the Penalty Interest Rates Act 1983 is a reference to “…the interest rate expressed as a percentage fixed by the Attorney-General from time to time by notice published in the Government Gazette….”. As this amount may vary, the following table provides what Adjudicate Today understands is the relevant interest rate under section 2 of the Penalty Interest Rates Act 1983 for certain periods:
| PERIOD | INTEREST RATE (%)* |
|---|---|
| 1/08/2014 to 31/05/2015 | 10.5 |
| 1/06/2015 to 31/01/2017 | 9.5 |
| 1/02/2017 to date | 10 |
* In all cases, the Claimant MUST make its own enquiries to satisfy itself of the relevant rate of interest.