Tools
Free Late Payment Interest Calculator
Calculate late payment interest on overdue invoices using principal, annual rate, and days overdue.
Enter the overdue invoice amount, annual interest rate, and days past due to calculate late payment interest.
Interest and total amount due appear here once the inputs are valid.
What is late payment interest?
Late payment interest is extra money charged on an overdue invoice balance. It compensates you for the time your cash was unavailable. Many contracts and statutory rules specify an annual rate applied for each day the payment is late.
How this calculator works
- Enter the principal: Principal is the unpaid invoice amount before interest is added.
- Enter the annual interest rate: Use the rate stated in your contract or the statutory rate that applies in your region.
- Enter days overdue: Count the days from the due date until payment (or until today's date if still unpaid).
- Calculate simple interest: Interest is principal multiplied by the annual rate, then multiplied by days overdue divided by 365.
- See the total due: The total is principal plus interest, rounded to two decimal places.
Late payment interest formula
interest = principal × (annual rate / 100) × (days overdue / 365)
This calculator uses simple interest on a 365-day year. Total due is principal plus interest.
Worked example
An overdue invoice is £5,000 at 8% per year and is 45 days late. Interest is £5,000 × 0.08 × (45 ÷ 365) = £49.32. The total due is £5,049.32.
When to use this calculator
Use it before sending a reminder on a late invoice, when updating your terms, or when checking how much interest has accrued on an unpaid balance.
Confirm when payment was originally due with the Payment Terms Calculator.
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Founder, Scottsdale Creative
Frequently asked questions
Track overdue invoices with less hassle
You calculated the interest. TapBooks helps you send invoices, track payments, and stay on top of overdue amounts.
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- Personalized onboarding help
- Setup in minutes, not hours
- Start free. No credit card
- Cancel anytime