Subcontract Payment Delay & Unfair Terms Calculator

Subcontract Payment Delay & Unfair Terms Calculator helps estimate Korea-related debt, insolvency, workout, bankruptcy, late interest, and recovery assumptions in English.

Legal scenario inputs

Enter Korea-related court, traffic, debt, family, civil, medical-dispute, criminal, or real-estate dispute assumptions. Results are simplified planning estimates.

Interest or recovery cost

₩23,250,000

Settlement target

₩53,250,000

Monthly payment estimate

₩887,500

Relief or exempt ratio

0%

60 month plan

Korea Subcontracting Act (Fair Transactions in Subcontracting Business Act) art. 13 requires the prime contractor to pay within 60 days of receiving the goods or work. Late payment accrues delay interest at 15.5% per year (FTC notice), bill payments accrue a 7.5% per-year discount fee, and unfair special terms under art. 3-4 are void in part. Korea-based 2026 rules; this is an estimate, not legal advice.

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What is the Subcontract Payment Delay & Unfair Terms Calculator?

This calculator estimates how much a subcontractor can claim when a prime contractor fails to pay subcontract payments on time under Korea’s Subcontracting Act (the Fair Transactions in Subcontracting Business Act).
It computes the statutory delay interest, bill (promissory note) discount fees, and substitute-payment fees, and it screens the contract for unfair special terms.
The figures reflect the Act and the related Fair Trade Commission (FTC) notices as of 2026.

Whether you are a construction, manufacturing, or service subcontractor who has waited more than 60 days for payment, or you were paid by a long-dated bill, this tool shows the total claimable amount in one place.
Use it before filing an FTC report, requesting subcontract dispute mediation, or preparing a payment order or civil lawsuit.

Korea-specific disclaimer: This calculator is based entirely on Korean law — specifically the Fair Transactions in Subcontracting Business Act (Subcontracting Act) Articles 13, 13-2, 3-4, 25-3, and 35, and the FTC notices setting the 15.5% delay interest rate and the 7.5% bill discount rate.
It provides a reference estimate only and does not replace advice from a Korean attorney or the Fair Trade Commission. Laws and notices may change; always verify the current rules before acting.

Who is this for?

  • • Construction, manufacturing, or service subcontractors unpaid for more than 60 days
  • • Subcontractors paid by promissory notes who bear discount costs
  • • Businesses checking whether a contract contains prohibited unfair special terms
  • • Staff preparing an FTC report or subcontract dispute mediation
  • • Practitioners calculating the claim amount (principal + delay interest) for a payment order or lawsuit

Payment Deadline and Delay Interest (15.5% per year)

Article 13 of the Subcontracting Act requires the prime contractor to set a payment date within 60 days of receiving the goods or completed work, and to pay by that date.
Paying later triggers delay interest at the rate set by the FTC for the period exceeding 60 days.

How the due date is set

  • • Receipt date + 60 days: for construction, the acceptance date; for services, the completion date (Art. 13(1)).
  • • Owner progress/completion payment + 15 days: if the prime contractor already received the completion or progress payment from the project owner, it must pay within 15 days of that date (Art. 13(3)).
  • • If no due date was set, the receipt date becomes the due date; if a date beyond 60 days was set, the 60th day is treated as the due date (Art. 13(2)).

The delay interest rate is 15.5% per year

Under the FTC notice on delay interest for advance and subcontract payments, the rate is 15.5% per year (Act Art. 13(8)).
Delay interest is calculated as follows.

Delay interest = unpaid principal × 15.5% × (delay days ÷ 365)

For example, if the unpaid amount is KRW 50 million and payment is 130 days past due, the delay interest is about KRW 2.76 million (50,000,000 × 15.5% × 130 ÷ 365).
Once a lawsuit is filed, an additional 12% per year under the Act on Special Cases Concerning Expedition of Legal Proceedings may apply from the day after the complaint is served.

Bills and Substitute Payment Fees

When subcontract payments are made by promissory notes or substitute-payment instruments rather than cash, the prime contractor must cover the cost the subcontractor bears until the funds are cashed.
This calculator adds the bill discount fee and the substitute-payment fee to the total claimable amount.

Bill discount fee (7.5% per year)

If the prime contractor pays with a promissory note, it must pay the discount fee from the date the note is handed over until its maturity date (Art. 13(6)).
The discount rate is 7.5% per year under the FTC notice on bill discount rates for subcontract payments.

If the note is handed over within 60 days of receipt, the fee for the period from the 60th day to maturity must still be paid within 60 days.
The calculator automatically applies the period from the due date (60 days) to maturity.

Substitute-payment fee

For substitute-payment instruments such as corporate purchase cards, accounts-receivable-backed loans, or purchase loans, the fee (including loan interest) from the payment date to the repayment date must be paid on the payment date (Art. 13(7)).
The fee rate is the rate agreed between the prime contractor and its financial institution (Art. 13(10)).

Enter the payment amount, payment date, repayment date, and agreed fee rate, and the calculator computes the fee for the portion exceeding 60 days.

Prohibition of Unfair Special Terms (Art. 3-4) and Voidness

Article 3-4 of the Subcontracting Act prohibits the prime contractor from setting contract conditions that unfairly infringe or restrict the subcontractor’s interests — that is, unfair special terms.
Agreements falling into the following categories are treated as unfair special terms and may be void in part.

Common unfair special terms

  • • Off-document costs (Item 1): shifting to the subcontractor costs arising from demands not stated in the written contract.
  • • Complaint and industrial-accident costs (Item 2): shifting costs the prime contractor should bear, such as civil complaints and industrial accidents.
  • • Off-bid costs (Item 3): shifting costs arising from demands not in the bid specification.
  • • Guarantee imbalance: requiring a performance guarantee from the subcontractor while excluding the prime contractor’s payment guarantee duty.
  • • Restricting price adjustment: limiting the subcontractor’s right to request or negotiate a price adjustment when input costs rise.
  • • Reducing liability: unfairly reducing or shifting the prime contractor’s damages or warranty liability.

Unfair special terms under Items 1 to 3 of Article 3-4(2) are void to that extent, and terms under Item 4 are void to that extent when they are markedly unfair to one party (Art. 3-4(3)).
Costs already borne under an unfair special term can be recovered as unjust enrichment, so enter the shifted cost to see the voidable amount.

How to Use

Step 1: Enter the unpaid principal and receipt date

Enter the unpaid subcontract payment and the receipt date (construction acceptance or service completion date).
If you received a completion or progress payment from the owner, switch the basis to 15 days for an earlier due date.

Step 2: Choose payment status and method

Select whether the cash is still unpaid or was paid late, and enter the reference date.
If you were paid by a note or substitute instrument, enter the issue/maturity dates and fee rate to add the discount fee.

Step 3: Screen for unfair special terms

On the unfair-terms tab, check any disadvantageous clauses in your contract and enter the shifted cost.
The voidable / recoverable amount is totaled automatically.

Step 4: Use the result

Review the total claimable amount (principal + delay interest + discount fee) and the penalty surcharge cap, then follow the action steps to prepare a certified letter, report, or lawsuit.

Worked Scenarios

Unpaid construction subcontract

The work is finished and accepted, but the prime contractor has not paid after 60 days.
The due date is receipt + 60 days; compute the delay interest at 15.5% per year and prepare an FTC report and a payment order together.

Manufacturing paid by bill

Payment is made by a long-dated promissory note, delaying access to cash.
Compute the bill discount fee at 7.5% per year and claim it, together with delay interest for any unpaid period.

Contract with unfair terms

The contract makes the subcontractor bear industrial-accident or complaint-handling costs.
Use the unfair-terms screen to size the voidable amount, and recover costs already paid as unjust enrichment.

Frequently Asked Questions

Q. What is the subcontract delay interest rate?

A. It is 15.5% per year under the FTC notice.
It applies to the period exceeding 60 days from the receipt date when payment is late (Subcontracting Act Art. 13(8)).

Q. When does the due date start?

A. In principle, 60 days from the receipt date (construction acceptance or service completion).
If the prime contractor received a completion or progress payment from the owner, it must pay within 15 days of that date, allowing an earlier start.

Q. Am I at a loss if I am paid by a bill?

A. The prime contractor must bear the discount fee (7.5% per year) until the note is cashed, so you can claim it.
If the note maturity exceeds the maturity of the note the prime contractor received from the owner, that itself violates the Act.

Q. How do unfair special terms become void?

A. Terms under Items 1 to 3 of Art. 3-4(2) are void to that extent.
Item 4 terms are void when markedly unfair to one party, and costs already borne can be recovered as unjust enrichment.

Q. Where do I report?

A. You can report to the Fair Trade Commission (1670-0007).
You may also apply for mediation at the Subcontract Dispute Mediation Council of the Korea Fair Trade Mediation Agency (1588-1490) for a faster resolution without litigation.

Tips and Cautions

  • Three-year limitation period: subcontract payment claims are subject to a short limitation period, so interrupt it with a certified letter, payment order, or lawsuit and act early.
  • Preserve evidence: keep the contract, purchase orders, tax invoices, acceptance records, and message logs to prove the receipt date and non-payment.
  • Penalty surcharge and corrective order: non-payment and unfair special terms can draw a penalty surcharge of up to twice the subcontract payment (Art. 25-3).
  • No retaliation: if the prime contractor retaliates for a report or mediation, that is subject to separate treble damages (Art. 35).
  • Consult a professional: this calculator is a reference estimate. For large amounts or complex issues, consult a Korean attorney or the Fair Trade Commission.

Calculate your subcontract claim now

Enter the unpaid principal and receipt date to see delay interest, bill discount fees, and the voidable amount for unfair terms at once.

Use the result as the basis for a certified letter, an FTC report, or the claim amount in a payment order or lawsuit.