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OZO Late Payment Calculator

Free Late Payment Interest Calculator

Calculate the interest and fees on an overdue invoice from the amount, the rate and how many days late it is.

  • Free forever
  • No signup
  • Instant results
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Use the rate in your terms, or the statutory rate where you are.

How late?

Some laws allow a fixed recovery fee on top of interest.

Enter the amount, rate and how late it is.

How to calculate interest on a late invoice

  1. 1

    Enter the overdue amount

    Type the unpaid amount of the invoice.

  2. 2

    Set the interest rate

    Use the rate in your terms and conditions, or the statutory rate that applies where you are.

  3. 3

    Say how late it is

    Enter the number of days overdue, or pick the due date and the payment date.

  4. 4

    Add any fixed fee

    If your terms or local law allow a fixed late fee, add it to see the total now due.

Charging for late payment

Late payments cost small businesses money and time. Charging interest compensates you for the delay and encourages prompt payment next time. Most schemes use simple interest, calculated per day from the due date until the invoice is paid, sometimes with a fixed fee for the cost of chasing.

The formula

  • Daily interest = overdue amount × annual rate ÷ 100 ÷ 365
  • Interest due = daily interest × days late
  • Total due = overdue amount + interest + any fixed fee

Avoid the problem in the first place: put clear terms and a due date on every invoice, and send customers who owe money a statement of account.

Frequently asked questions

How is late payment interest calculated?

Usually as simple interest: overdue amount × annual rate × days late ÷ 365. An invoice of 2,000 that is 30 days late at 8% a year accrues 2,000 × 0.08 × 30 ÷ 365 = 13.15.

Can I charge interest on a late invoice?

Often yes, if your contract or invoice terms say so, and some countries give businesses a legal right even when they don’t. In the UK, for example, businesses can usually claim 8% above the Bank of England base rate plus a fixed recovery sum. Check the rules where you and your client are based.

Should I put late payment terms on my invoices?

Yes. Stating the interest rate and any fees in your terms, and showing a clear due date, makes it far easier to claim, and often prompts clients to pay on time.

When does interest start?

Normally the day after the payment due date. That is why every invoice should show an exact due date rather than “payable on receipt”.

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