No More Pennies to Pinch After Production Ceases

In November 2025, the U.S. Department of the Treasury ended the production of pennies, citing increased production costs. While pennies remain in circulation, cities should prepare to calculate bills and fees to the nearest nickel rather than the penny. 

The U.S. Department of the Treasury has not issued formal guidance establishing requirements for rounding fees and bills calculated to the cent. However, it did issue recommendations on December 23, 2025, in an article titled “Penny Production Cessation FAQs” that local governments may follow the guidance provided in a report by the National Council of State Legislators (NCSL), “Elimination of the Penny: Cents-able Considerations.”

NCSL’s report contains several options for governments to consider but cites the most recommended form as symmetrical rounding. It describes the symmetrical rounding rule as when “the final digit of the total transaction amount (including taxes) is 1, 2, 6, or 7 cents, then the amount is rounded down to the nearest multiple of five. If the final digit is 3, 4, 8, or 9 cents, the amount is rounded up. Transactions totaling exactly $0.01 or $0.02 might be rounded up to $0.05. Rounding rules would not apply to payments made via electronic methods, checks, gift cards, or other non-cash instruments.” Because this policy affects how the city calculates and receives funds, the best practice is for the legislative body to adopt the policy by municipal order.

It is important for cities to provide notice to consumers before transitioning to symmetrical rounding. One approach is to establish a specific date for the transition, with notice to citizens provided a few months prior to that date. Notice can be provided in many ways: post notices at city hall, post notices at payment/processing locations for taxes and utilities, send notices by mail, and include notices as informational inserts for utility bills.

Providing citizens with adequate notice will reduce confusion and assist the city in a smoother transition.