Late Payment Interest Calculator
See how much interest to add to an overdue invoice. Enter the amount, due date, payment date and interest rate.
Formula
(365 days for an annual rate, 30 days for a monthly rate)
Total owed = Invoice amount + Interest + Fixed fee
Charging interest on overdue invoices
Many countries let businesses charge interest and sometimes a fixed fee on late commercial payments. In the UK the Late Payment of Commercial Debts Act allows 8% above the Bank of England base rate. In the US, rules vary by state and by what your contract says. Always state your late payment terms on the invoice before the work starts.
Example
A $5,000 invoice that is 30 days late at 8% a year earns 5,000 x 0.08 x 30 / 365 = $32.88 in interest. The total owed becomes $5,032.88.
Frequently asked questions
How do I calculate interest on a late invoice?
Multiply the invoice amount by the interest rate, then by the number of days late, and divide by 365 for an annual rate.
What interest rate can I charge on late payments?
It depends on your country and contract. The UK statutory rate is 8% over the Bank of England base rate. Check local law and put your rate in your payment terms.
Is this legal advice?
No. This is a simple calculator for estimates. Speak to a lawyer or accountant before charging late fees.
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