Work out what a late customer owes. Enter the invoice amount, due date and payment date, then an annual or monthly interest rate (simple or compound) and any flat late fee to get the days late, the late charges and the total due.
Last updated:
Invoice
$
days
Late charges
%
Interest method
$
One-time fee added once the invoice is late (0 for none).
Enter your values to see the result.
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How to use the Late Payment Interest Calculator
Enter the invoice amount, its due date and the date it was (or will be) paid.
Choose the interest type: an annual rate, a monthly rate, or a flat fee only.
Pick simple or compound interest and how partial months are charged.
Add a flat late fee or grace period if your terms include them.
Read the total due, and use the table to see charges if payment comes later.
Late payment interest formulas
Days late = payment date − due date.
Simple annual interest = amount × annual rate × days late ÷ 365 (or 360).
Monthly rate = amount × monthly rate × months late, where months = days ÷ (365 ÷ 12) when pro-rated, or the number of started 30-day periods.
Total due = amount + interest + flat fee. Example: $2,500 paid 45 days late at 1.5% a month pro-rated: months = 45 ÷ 30.4167 = 1.4795, interest = 2,500 × 0.015 × 1.4795 = $55.48.
Simple interest at 12% a year
Invoice
30 days late
60 days late
90 days late
1.5% for one month
$500
$4.93
$9.86
$14.79
$7.50
$1,000
$9.86
$19.73
$29.59
$15.00
$2,500
$24.66
$49.32
$73.97
$37.50
$5,000
$49.32
$98.63
$147.95
$75.00
$10,000
$98.63
$197.26
$295.89
$150.00
Always state your late payment terms (rate, method and any flat fee) on the invoice and in the contract, and stay within the legal limits where you and your customer are located.
Frequently asked questions
How do I calculate interest on a late payment?
For simple interest, multiply the amount by the annual rate and by the days late divided by 365. A $2,500 invoice paid 30 days late at 12% a year accrues 2,500 × 0.12 × 30 ÷ 365 = $24.66.
Is 1.5% per month the same as 18% a year?
As simple interest, yes: 1.5% × 12 = 18% a year. If the 1.5% compounds monthly, the effective annual rate is (1.015)^12 − 1 ≈ 19.56%.
Can I charge interest on an overdue invoice?
Usually only if the late charge was agreed in the contract or stated on the invoice terms before the work, and it must be within legal limits. Many US states cap late fees and interest rates; check your state's rules or ask a lawyer.
What is statutory late payment interest in the UK?
Under the Late Payment of Commercial Debts (Interest) Act 1998, a business can claim interest at 8% above the Bank of England base rate on late business-to-business payments, plus fixed compensation of £40, £70 or £100 depending on the debt size.
Should I use simple or compound interest?
Simple interest is the most common for invoices and is easier for customers to check. Compound interest charges interest on previous interest and should only be used if your agreement explicitly allows it.
What is a grace period?
A grace period is a number of days after the due date during which no late charge applies. Depending on your terms, once it is exceeded interest may run from the original due date or only from the end of the grace period; tick the box to charge only the days after it.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.