Late Payment Interest Calculator

About this calculator

This calculator computes the interest penalty that accumulates on an unpaid invoice from its due date to the actual payment date. Simple interest applies the annual rate proportionally to the number of days overdue (Principal × Rate × Days/365). Monthly and daily compound interest use standard compounding formulas and produce a slightly higher penalty the longer the invoice goes unpaid. The result shows both the penalty amount and the revised total owed, with a side-by-side comparison when compound interest is selected.

Field explanations

Invoice amount

The original unpaid invoice total — the principal on which interest accrues.

Invoice due date

The date payment was originally due per your contract or invoice terms (e.g., Net 30). Interest begins accruing the day after this date.

Payment received date

The date the payment was or will be received. Set to today to see the current outstanding penalty. Set it to a future date to project the penalty at a specific deadline.

Annual interest rate

The late payment interest rate specified in your contract or the applicable statutory rate. Common contract rates are 1.5%/month (= 18% annual). Statutory rates vary by jurisdiction — the US federal rate is around 8%, the UK Late Payment Act sets 8% above the Bank of England base rate, and many US states set a maximum of 12–18%.

Interest method

Simple interest is the most common for invoices and easiest to verify. Monthly compounding is sometimes used in longer-term contracts. Daily compounding produces the highest penalty and is uncommon for standard invoices. Check your contract terms to confirm which method applies.