Late Payment Interest Calculator
Estimate simple interest and late fees on an overdue invoice, including a grace period and your required day-count convention.
View all free toolsInvoice inputs
Use the outstanding balance and the rate permitted by your agreement and jurisdiction.
The unpaid invoice principal, excluding previous interest or fees.
The contractual or statutory annual simple-interest rate.
Count calendar days after the invoice due date.
Interest and the fixed fee begin only after this period is exceeded.
Choose the divisor required by the contract or applicable rules.
A one-time fee added only after the grace period. Leave blank for none.
Total amount due is $10,106.51. Total late charges are $106.51 across 35 chargeable days.
Total amount due
Late charges applied
$10,106.51
Late charges of $106.51 have been added to the invoice balance.
Chargeable days
35
Days overdue minus the grace period, never below zero.
Daily interest rate
0.02329%
$2.33 per day on the invoice principal.
Simple accrued interest
$81.51
Daily interest amount multiplied by chargeable days.
Fixed late fee applied
$25.00
Applied once after the grace period; no fee is applied while within grace.
Total late charges
$106.51
Simple accrued interest plus the applied fixed late fee.
How to calculate late payment interest on an invoice
Late payment interest converts an annual rate into a daily charge and applies it only to the overdue balance and eligible days. This calculator uses simple interest, so accrued interest is not added back to principal and does not compound.
Chargeable days
Maximum of (days overdue − grace period) and 0
Daily rate
Annual interest rate ÷ 365 or 360
Accrued interest
Invoice amount × annual rate × chargeable days ÷ day-count basis
Total amount due
Invoice amount + accrued interest + applicable fixed late fee
Worked example
A $10,000 invoice is 45 days overdue with a 10-day grace period, an 8.5% annual rate, a 365-day basis, and a $25 fixed fee. There are 35 chargeable days. Simple interest is $10,000 × 8.5% × 35 ÷ 365 = $81.51. Total late charges are $106.51, making the total amount due $10,106.51.
Before adding late charges
Check the agreement
Confirm the invoice, contract, or credit terms state the rate, fee, grace period, and start date.
Check local law
Statutory rates, maximum rates, consumer protections, and notice rules differ by jurisdiction.
Use the unpaid principal
Reduce the invoice amount for payments or valid credits before calculating interest.
Document the calculation
Show the principal, rate, eligible days, basis, interest, and fee clearly on the notice.
Explore more finance calculators
Use Finamodel's free tools to check cash flow, working capital, returns, margins, and other business finance decisions.
Browse all free toolsFrequently asked
This calculator uses simple interest: invoice amount multiplied by the annual interest rate, multiplied by chargeable days, divided by the selected 365- or 360-day basis. It does not compound interest or add interest to the invoice principal.
The grace period is subtracted from total days overdue. Interest and the optional one-time late fee begin only after the grace period has been exceeded. A 10-day grace period on an invoice that is 45 days overdue produces 35 chargeable days.
Use the convention required by the contract or applicable law. A 365-day basis divides the annual rate by 365. A 360-day commercial basis divides it by 360 and therefore produces a slightly higher daily rate for the same annual rate.
Sometimes, but not always. Contracts and local laws may restrict late fees, interest rates, notice requirements, or charging both at once. Confirm the signed payment terms and applicable law before issuing a charge.
Enter the contractual or statutory annual rate that legally applies to the invoice. Do not assume a standard rate: permitted rates and caps vary by jurisdiction, transaction type, customer type, and agreement.
No. It provides a planning estimate from the inputs you enter. It does not determine whether a rate or fee is enforceable, when interest legally starts, or whether taxes and prior payments affect the balance.
Have more financial modelling questions? Contact us
