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Late Payment Interest Calculator

Calculate estimated interest on an overdue invoice based on the amount owed, annual interest rate, and days late.

Your Details

Interest Method

Choose whether interest is calculated as simple daily interest or compounded daily.

Overview

Use this late payment interest calculator to estimate how much interest may have built up on an overdue invoice. Enter the unpaid amount, annual interest rate, number of days late, and choose simple or daily compound interest to see the estimated interest and total due.

How it works

The calculator converts the annual interest rate into a daily rate by dividing it by 365. It then applies that daily rate to the overdue amount for the number of days late. For simple interest, the interest builds only on the original amount. For compound daily interest, interest is added to the balance each day and future interest is calculated on the growing total.

How to use this calculator

  1. 1Enter the overdue invoice amount.
  2. 2Add the annual late payment interest rate.
  3. 3Enter the number of days the payment is late.
  4. 4Choose simple interest or daily compounding.
  5. 5Review the estimated interest and total amount due.

Example Calculation

Invoice Amount

$1,000

Annual Interest Rate

8%

Days Late

30

Interest Method

simple

Estimated Late Payment Interest

N/A

For a $1,000 overdue invoice at 8% annual interest for 30 days using simple interest, the estimated interest is about $6.58 and the total amount due is about $1,006.58.

Frequently asked questions

What does this late payment interest calculator estimate?

It estimates the interest that may have accrued on an overdue balance using the amount owed, annual interest rate, days late, and interest method.

Does this calculator include late fees or compensation charges?

No. It estimates interest only and does not include fixed late fees, administrative charges, or statutory compensation unless you add those separately.

What is the difference between simple and compound interest?

Simple interest is calculated only on the original overdue amount. Compound interest adds interest to the balance as it builds, so future interest is charged on a higher amount.

Why is the daily rate based on 365 days?

A 365-day year is a common approach for daily interest calculations. Some contracts or legal rules may use a different basis.

Can I use this for statutory late payment interest?

You can use it as a general estimate, but statutory rules vary by country and may also allow fixed compensation or use specific reference rates.

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Assumptions and warnings

Assumptions

  • Results are estimates based on the invoice amount, annual rate, and number of days late entered.
  • The daily rate is calculated using a 365-day year.
  • This calculator does not include fixed late fees, collection costs, or statutory compensation amounts.
  • Interest starts accruing from the date the payment became overdue.

Warnings

  • This calculator provides an estimate only and is not legal or financial advice.
  • Late payment rules and allowable interest rates can vary by contract and jurisdiction.