This late payment interest calculator works out how much interest an overdue invoice has earned. Enter the amount, the rate and either two dates or a number of days. You get the interest, the daily interest and the total due.
The formula
annual rate = entered rate (Annual)
= entered rate x 12 (Monthly)
Simple: interest = amount x annual rate x days / day count
Daily: interest = amount x ((1 + annual rate / day count)^days - 1)
Monthly: interest = amount x ((1 + annual rate / 12)^(days / (day count / 12)) - 1)
daily interest = amount x annual rate / day count
total due = amount + interest
The day count is 365 (Actual/365) or 360 (Actual/360). Days late = payment date - due date.
Worked example
Overdue amount $1,000. Rate 12% a year. 90 days late. Day count 365. Simple interest.
- Interest: $29.59 (1000 x 0.12 x 90 / 365)
- Interest per day: $0.33
- Total due: $1,029.59
- As % of the original amount: 2.96%
Same case with compounding:
- Compounded monthly: $29.88
- Compounded daily: $30.03
Dates example. $5,000 at 8% a year, due 2026-01-31, paid 2026-04-30.
- Days overdue: 89
- Interest: $97.53
- Interest per day: $1.10
- Total due: $5,097.53
How to read the result
The gap between simple and compound interest is small on short delays. Use compounding only if your contract allows it.
Count days from the due date to the payment date. The due date itself is not a late day. Pick "Due date and payment date" to avoid counting errors.
Many countries set a statutory late payment rate or a maximum rate. Rules differ and can change. Confirm the allowed rate with a legal adviser or an accountant. The default rate here is only an example.
Use the day-count basis from your contract. A 360-day count gives $30.00 in the first example.
Related tools
- Invoice generator to add late payment terms
- Account statement generator to show the new balance
- Late payment fee calculator
- Days past due calculator
- Invoice late fees guide
- Overdue invoices guide
To see the statutory rate where your client is based, check our table of late payment interest rates by country, with official sources for each country.
Frequently asked questions
- How do I calculate interest on a late invoice?
- Multiply the overdue amount by the annual rate and by the days late, then divide by 365. For $1,000 at 12 percent for 90 days, the interest is $29.59.
- What is the difference between simple and compound interest?
- Simple interest uses only the original amount. Compound interest adds earlier interest to the balance. On $1,000 at 12 percent for 90 days, simple gives $29.59, monthly gives $29.88 and daily gives $30.03.
- Should I use a 365 or 360 day count?
- Use the basis in your contract. Actual/365 is common for invoices. Actual/360 is a banking convention and gives slightly more interest per day. If the contract is silent, choose 365.
- Can I charge interest if my invoice does not mention it?
- It depends on your country and contract. Some places give a statutory right to late payment interest and others do not. Check with a legal adviser, and state your rate on every invoice.
- How do I convert a monthly rate to an annual rate?
- Multiply by 12. A 1.5 percent monthly rate becomes 18 percent a year. The calculator does this when you set the rate to monthly.
- What is the difference between a late fee and late interest?
- A late fee is a flat or percentage charge for each late period. Interest grows with the number of days late. Use the late payment fee calculator for fees.