Late Payment Interest Calculator

Three numbers are all you need. Type the unpaid invoice amount, the annual interest rate you're applying, and how many days the payment is past due. The tool calculates the interest instantly as you type.

For the invoice amount, use the balance that's actually outstanding. If the client paid part of the bill, enter only the remaining unpaid portion, not the original total.

For the rate, enter the annual percentage you're charging. This might be a rate written into your contract, a flat rate you've agreed with the client, or a statutory rate set by law where you operate. If you're not sure what to use, see the tips below.

For the days overdue, count from the day after the payment due date up to today (or up to the date you expect to be paid). A 30-day invoice issued on the 1st is due on the 1st of the next month, so day one of "overdue" is the day after that.

This calculator uses simple interest, the most common method for invoices. The formula is straightforward:

Interest = amount x annual rate x (days overdue / 365)

In plain terms: you take the annual interest the full balance would earn over a year, then charge only the fraction of the year the invoice is actually late. Dividing the days overdue by 365 turns the annual rate into a daily one.

Here's a worked example. Say a client owes 5,000 on an invoice, you charge 8% per year, and they're 45 days late. The math is 5,000 x 0.08 x (45 / 365), which comes to about 49.32 in interest. So the client owes 5,049.32 in total.

Simple interest charges the rate on the original unpaid balance only. It does not compound, meaning it doesn't charge interest on interest already accrued. That keeps the figure easy to explain to a client and easy to defend if the amount is ever questioned. Some jurisdictions use a 360-day year or a different day-count convention, so if you're applying a statutory rate, check the exact method your local rules require.

You can usually charge interest on an overdue invoice when the right to do so was set out before the work was billed, or when local law grants it automatically. The cleanest path is a clear payment term agreed in advance.

Spell out your interest policy in your contract, your quote, or on the invoice itself, ideally all three. State the rate, when it starts, and the day count you'll use. A client who agreed to "2% per month on overdue balances" up front has far less room to dispute a charge than one who sees an interest line for the first time on a reminder.

Many places also have late-payment laws that let businesses charge a statutory rate on commercial invoices even without a contract clause, often alongside a fixed recovery fee. The rules, rates, and eligibility vary widely by country and sometimes by state or region, so confirm what applies to you before relying on a statutory rate.

Interest is a tool for getting paid, not a penalty to spring on a client. Used well, it nudges slow payers without souring the relationship.

Send a friendly reminder before any interest appears. Most late payments are oversights, not refusals. A clear nudge a few days after the due date often clears the balance with no interest needed at all. If you do apply interest, show your working: list the unpaid amount, the rate, the days overdue, and the resulting figure so the client can see exactly how it was reached.

Keep your rate reasonable and consistent. A modest rate you apply to everyone is easier to defend than a steep one used selectively. And once an invoice is paid, stop the clock. Calculate interest up to the payment date, not beyond it.

A calculator tells you what you're owed. Getting paid faster is a workflow problem, and that's where Platybooks comes in.

Platybooks sends automated overdue reminders at 3, 7, and 14 days past due, so slow invoices get chased without you lifting a finger. Clients can pay through a hosted payment link in a couple of clicks, and the invoice status updates on its own the moment they do. A cash-flow dashboard shows you what's outstanding, what's overdue, and what landed this month at a glance.

You can start on the Free plan with no credit card, send branded invoices and quotes with a live PDF preview, and add automated reminders when you're ready. The best way to avoid calculating late-payment interest is to get paid on time in the first place.