Late payment interest is the charge added to an overdue invoice for each day it stays unpaid. It is calculated as the invoice amount times the annual rate, divided by 365, times the days overdue. This calculator returns the interest owed, the daily accrual and the total now due. Enter the rate from your contract or your country's statute. Nothing stored.
Interest owed
€44.71
after 34 days late
Per day
€1.32
accrues each further day unpaid
Total now due
€4,845
invoice plus interest to date
At 10% a year, this invoice earns €1.32 every day it stays unpaid — €39.45 a month. That number is usually worth more in the reminder email than in the eventual collection: a late fee that is named, specific and already accruing changes payment behavior in a way a vague threat does not.
This is simple interest and general information, not legal advice. Whether you can charge it, and at what rate, depends on your contract and jurisdiction: in the EU it is a statutory right for B2B invoices, in the US it is a matter of contract and state limits. The details are below.
The formula
Late payment interest is the invoice amount times the annual rate, divided by 365, times the days overdue. It is simple interest, so nothing compounds. People most often start the count at the invoice date, when it should start the day after the due date, and the rate must be the one in your contract or your country's statute.
daily interest = invoice amount x annual rate / 365
interest owed = daily interest x days overdue
Interest is simple and counts from the day after the due date. The due date itself, and the net-30 or net-60 period before it, are the interest-free credit you already extended. That is the insight hiding in the arithmetic: an unpaid invoice is a loan you are making involuntarily, at whatever rate you did or did not put in the contract.
The terms that decide the due date are covered in what net 30 actually means, and the system that stops invoices going overdue in the first place is in getting paid on time.
Where the rate comes from
There is no universal late-payment rate, which is why the calculator asks rather than assumes. In the EU, Directive 2011/7/EU makes interest on late B2B invoices a statutory right: at least 8 percentage points above the European Central Bank's reference rate, plus a minimum of €40 compensation for recovery costs, with standard payment terms between businesses capped at 60 days unless expressly agreed otherwise.
Member states publish the resulting percentage (the Your Europe table lists each country), and it moves when the ECB moves, so check your national figure rather than trusting a page that hardcoded last year's.
In the US, it is contractual: there is no federal statutory rate, so the interest clause in your agreement is what you can enforce, subject to state usury limits. Common practice is 1 to 1.5 percent per month, stated on the contract and repeated on the invoice. Everywhere, the clause earns most of its money before any interest is collected: a named, accruing charge changes when people pay. The wider damage late invoices do to a business, and what fixes it, is the receivables section of the cash flow problems guide.