Indiana Code Title 5. State and Local Administration § 5-17-5-4

Sec. 4.  (a) This section applies to contractors receiving late payment penalties under section 1 of this chapter.

(b) A contractor who is unable to make timely payments to a subcontractor because of a state agency or political subdivision's failure to make timely payments to the contractor shall pay interest to the subcontractor at the rate of one percent (1%) per month on the amount due the subcontractor after the contractor receives payment and any penalty paid under this chapter.

(c) Any interest that remains unpaid to the subcontractor at the end of any thirty (30) day period shall be added to the principal amount of the debt.  After that time, interest accrues on the aggregate of the principal and unpaid interest.