Free Tool

Late Payment Interest Calculator

Work out the interest owed on an overdue invoice, using your contract rate or UK statutory interest, and copy a reminder that states the amount.

No signup. Everything is calculated in your browser and nothing is stored.

Overdue invoice

Interest rate

Result

Days overdue

45

Sun, Aug 9, 2026 to Wed, Sep 23, 2026

Interest accrued

$110.96

18.00% a year, $2.47 a day

Late fee

$0.00

Total now owed

$5,110.96

Reminder text

Invoice [number] for $5,000.00 was due on Sun, Aug 9, 2026 and is now 45 days overdue. Under our payment terms, late payment interest of 18.00% a year has accrued ($110.96 to Wed, Sep 23, 2026), bringing the total to $5,110.96. Please arrange payment at your earliest convenience, or let us know if there is an issue with the invoice.

Simple interest, not compounded. Not legal advice: check your contract and local rules before charging.

Stating the interest is often enough

Most clients who pay late are not refusing to pay. Your invoice is simply lower in their payment queue than someone else’s. A reminder that states the exact interest that has accrued changes that ordering, because it turns a vague overdue notice into a number that grows every day.

The rate you can charge depends on your contract and where you and the client are. In the UK, statutory interest and fixed compensation apply to business debts automatically. Elsewhere, the rate usually needs to be in your payment terms before the work starts, which is why it belongs in every contract and invoice footer.

Frequently asked questions

How is late payment interest calculated?

Most contracts use simple interest: invoice amount x annual rate x days overdue / 365. A rate quoted per month is converted to a daily rate the same way (monthly rate x 12 / 365). Interest runs from the day after the due date until payment arrives.

What is statutory late payment interest in the UK?

For business-to-business debts, the Late Payment of Commercial Debts (Interest) Act lets you charge 8% a year above the Bank of England base rate, plus fixed compensation of £40, £70, or £100 depending on the size of the debt. The base rate to use is the one in force on 30 June or 31 December before the payment became overdue.

Can I charge interest if it is not in my contract?

In the UK, statutory interest applies to B2B debts even if the contract is silent. In the US and many other countries, you generally need the rate to be in the contract or invoice terms, and state usury limits can cap it. Check the rules that apply to you.

Should I actually charge the interest?

Often the value is in stating it rather than collecting it. Showing the accrued amount on a reminder moves your invoice up the client’s payment queue. Many firms waive it if the invoice is paid within a set window.

Does interest compound?

Statutory and most contractual late payment interest is simple, not compound. This calculator uses simple interest.

Need the rate written into your terms first? Generate a late fee clause and invoice footer in a minute.

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