Late Payment Interest Calculator

Calculate late payment interest on overdue invoices. Enter the invoice amount, days overdue, and interest rate to instantly calculate the amount owing.

Late Payment Interest Calculator

Calculate the interest accrued on overdue invoices for Canadian small businesses and freelancers. Supports simple, compound monthly, and compound daily interest calculations.

$
Defaults to today if unpaid
Interest Type
Simple is most common; compound methods accrue more interest
%
Common rate: 18% per annum
$
One-time administrative fee (if any)
Pure arithmetic — works for any country or currency.Rules verified: October 25, 2026Inputs stay in your browser

Limitations

  • Uses the interest rate you enter; it does not look up CRA prescribed rates or statutory interest rates.

Results are estimates for general information and are not legal, tax, payroll or financial advice. Employment contracts, collective agreements and individual circumstances can change what you are owed.

Frequently Asked Questions

What is late payment interest?

Late payment interest is a charge applied to invoices that are not paid by the due date. It compensates the creditor for the time value of money and is used in commercial transactions across Canada.

What interest rate applies to late payment in Canada?

In Canada, the default rate for late payment of invoices is typically the Bank of Canada prime rate plus 4%, unless a contract specifies otherwise. Some provinces have specific regulations for small businesses.

What is the difference between simple, compound, and daily interest?

Simple interest is calculated once on the original amount. Compound interest is calculated on the principal plus accumulated interest. Daily interest accrues each day. This calculator supports all three methods.

Can I add a flat fee to the calculation?

Yes. Many invoices include both a daily interest charge and a flat administration fee. This calculator allows you to enter both and calculates the total owing.

Is the calculated interest enforceable in court?

Interest charges must be reasonable and specified in your contract or invoice. Always review provincial legislation and consult with a business lawyer to ensure your late payment terms are legally enforceable.