This page walks through the payment cycle in the Illinois Contractor Prompt Payment Act, from payment application to retainage. The overview explains which jobs are covered, and the checklist and FAQs turn the rules into steps. Retainage and slow payment both tie up cash, so related reading includes our pages on working capital and bank loans and construction and contractors.
What the law requires
| Requirement | In plain words | Section |
|---|---|---|
| Owner pays | If the contractor has performed under the contract, the owner pays within 15 calendar days after the owner or its agent approves a payment application. | 10(1) |
| Deemed approval | The application counts as approved 25 days after the owner receives it, unless a written statement of the amount withheld and the reason goes out before then. | 10(1) |
| Partial withholding | For non-conforming work, the owner may withhold only that part's reasonable value and pays for the rest. | 10(1) |
| Pay-through | For accepted work, a contractor pays its subcontractor, and a subcontractor its own, within 15 calendar days after receiving each payment, final payment or retainage. | 10(2) |
| Suspension | An unpaid contractor or subcontractor may suspend work without breach penalty after 7 calendar days' written notice. | 15(b) |
| Retainage cap | No more than 10% of each payment before the contract is 50% complete, and no more than 5% held from then on. | 20 |
Key numbers and dates
| Item | Amount or date | Year in force | Source label |
|---|---|---|---|
| Owner pays after approval | Within 15 calendar days | 2026 | CPPA 10(1) |
| Deemed approval | 25 days after receipt, unless a written withholding statement goes out first | 2026 | CPPA 10(1) |
| Pay-through to subcontractors | 15 calendar days after receipt | 2026 | CPPA 10(2) |
| Interest on late payment | 10% per year | 2026 | CPPA 15(a) |
| Notice before suspending work | 7 calendar days, in writing | 2026 | CPPA 15(b) |
| Retainage cap | 10% of each payment before 50% complete; 5% from then on | 2026 (Section 20 changed 2019) | CPPA 20 |
Source: 815 ILCS 603/10 and 603/15
Recent and pending changes
No amendment after Public Act 101-432, effective August 20, 2019, appears in the source notes of the text read on October 27, 2026.
Penalties and enforcement
The Act names no agency and has no fine or criminal penalty. The remedies are the unpaid amount, interest and the right to stop work. Lien rights come from a different law, the Mechanics Lien Act, which this page does not cover. A lender's claim on business assets is another matter again; see the Illinois UCC.
| Tier | What follows | Section |
|---|---|---|
| Late payment | The delinquent party owes the payment plus 10% interest per year | 15(a) |
| Overlap with lien interest | Not duplicated with Mechanics Lien Act interest | 15(c) |
| Still unpaid | Work may be suspended after 7 calendar days' written notice, until paid | 15(b) |
| Retainage above the cap | A contract may not permit holding back more than Section 20 allows | 20 |
Official sources
- Illinois General Assembly: Contractor Prompt Payment Act (815 ILCS 603)
- Illinois General Assembly: House Bill 1224 status
- Illinois General Assembly: Public Act 104-168 (House Bill 1224, enrolled text)
- Illinois General Assembly: Mechanics Lien Act (770 ILCS 60)
This page is a plain-language summary. The official source controls if there is any difference.