Late Payment Calculator
Penalty Breakdown
2.19
Daily Interest
65.75
Total Penalty
10,065.75
Total Amount Due
About Late Payment Interest
Late payment interest is a penalty charged when an invoice or loan repayment is not made by the due date. It compensates the creditor for the time value of money and incentivizes timely payment. The rate and terms are typically defined in the contract or by law.
Frequently Asked Questions
What is a typical late payment rate?
Rates vary by jurisdiction and contract. In the EU, the Late Payment Directive sets 8% above the ECB reference rate as a statutory default. US contracts commonly use 1.5%/month (18% APR). Check your agreement for the specific rate.
Can I charge late payment interest as a freelancer?
Yes, in most countries you can charge late payment interest if it is specified in your contract or invoice terms. Always include your payment terms clearly (e.g., "Net 30, 1.5% per month on overdue balances") to enforce them.
Does compound interest apply to late payments?
This calculator uses simple daily interest, which is most common for late payment fees. Some agreements may compound monthly — check your contract terms.
Formula
Penalty = Principal × Daily rate × Days