Late Payment Interest Calculator
Calculate exactly how much interest to charge on overdue invoices.
Results
Automate late payment reminders with BillingBee
Send automatic reminders before and after due dates so you never have to chase clients manually.
How to use this late payment calculator
Enter the original invoice amount and select your currency. Set the invoice due date and the date payment was (or will be) received. Enter your annual interest rate — 18% per annum is common in India — and any grace period you offer clients before interest starts accruing.
The calculator uses simple interest: Interest = Principal × Rate × Days / 365. The copyable line item gives you exact wording to paste into a follow-up invoice or credit note.
What interest rate should I charge?
The rate should be stated in your original invoice terms or client contract. Common rates are 1.5–2% per month (18–24% per annum). In India, 18% p.a. is a widely used benchmark that aligns with standard bank lending rates.
Frequently Asked Questions
Yes. Under the MSME Development Act 2006, buyers must pay within 45 days of delivery. If they don't, they owe compound interest at three times the RBI bank rate. For non-MSME transactions, the rate depends on your contract terms — always specify payment terms and late fees in your invoice or agreement.