Is there a set rate of interest for late payments in Australia?

No. There is no single national rate for business invoices, and no rate applies to an invoice unless your contract or your terms of trade put one there. Choose the rate when you write the terms, not when an invoice goes unpaid, and keep it close to what being without the money actually costs your business.

Which day do I start counting from?

From the day after the due date. A payment made on the due date is on time and attracts nothing. The tool counts calendar days, including weekends and public holidays, which is how most interest clauses are written. If your clause says something different about the counting, follow your clause rather than this page.

Can I charge interest if my terms say nothing about it?

Do not. Without a clause in the contract or in the terms you sent with the invoice, there is no agreed rate to apply, and an invoice that adds interest with nothing behind it is easy to dispute. Put the clause in your terms first, then use it on the next job. business.gov.au puts the same condition on interest in a letter of demand.

Simple interest or compound interest?

Simple interest on the unpaid amount, from the due date to the date of payment, is what a plain interest clause describes and what this calculator does. Compounding needs a clause that says so, produces a much larger figure than most people expect, and invites a harder argument if the invoice is ever tested.

Can a court reduce the interest I charge?

A court can decline to enforce a rate it treats as a penalty rather than a genuine estimate of loss, and under the unfair contract terms law a term in a standard form small business contract can be declared void. A rate roughly equal to what the unpaid money costs you is far easier to defend than one that punishes the client.

Does the calculator add anything to the amount I can claim?

No. It works out simple interest on the amount you enter and nothing else. Late fees, debt collection costs, admin charges and any GST on the interest are all separate questions, and each one needs its own clause before you can claim it.

Late payment interest calculator for Australia

Work out what interest applies to an overdue invoice, in dollars and cents, using the rate from your own terms. Type the amount, the rate, the due date and the date the invoice was or will be paid. The tool shows the days late, the interest per day and every step of the working.

Updated 3 October 2026

The short answer

Enter the invoice amount, the annual rate from your own terms, the due date and the payment date. The calculator counts the days late and works out simple interest on a 365 day year, then shows the interest a day, the unrounded figure, the amount rounded to the nearest cent in dollars and cents, and the new total payable. Interest can only be charged if your terms allow it.

Work out the interest on an overdue invoice

Simple interest on a 365 day year, worked out from the due date to the date the invoice was or will be paid. Your figures stay in this browser.

Invoice amount, including GST if you charged it

Type 4400 or 4,400.00, with or without the dollar sign. Use the whole invoice amount, not the balance after a part payment.

Annual interest rate from your terms (per cent)

The figure written into your contract or terms of trade. There is no national rate to fall back on, so this box has to come from your own paperwork.

Date the invoice was due

The due date on the invoice. Interest runs from the day after this date.

Date payment was made, or the date you expect it

Defaults to today. Change it to a future date to work out what the interest will be if the invoice is paid then.

Nothing is sent and nothing is stored. This page makes no network calls.

Interest can only be charged if your contract or your terms allow it, and the rate has to be the rate in those terms. A rate that is out of step with what the money actually costs you can be treated as a penalty rather than a genuine estimate of loss, and a court can review it. Read the notes further down this page before you put a figure in a letter.

What the figures come to

Days late

Interest a day

$0.0000

Interest owed

$0.00

Now payable

$0.00

How it was worked out

This works on the whole invoice amount sitting unpaid for the whole period, at a simple interest rate of the figure you typed, on a 365 day year with no compounding. Rounding to cents happens once, at the end.

What this calculator works out

Interest on an overdue invoice is simple arithmetic once you know the rate, and the rate is the hard part. This tool takes the amount, the annual rate from your own terms, the due date and the payment date, and works out the days late and the interest that has built up over them.

It shows the interest a day, the figure before rounding, the figure in dollars and cents and the new total payable. It assumes the whole amount sat unpaid for the whole period.

How the interest is worked out

Count the days late Count calendar days from the day after the due date to the date payment was made. Weekends and public holidays count like any other day. A payment on the due date is on time.
Find the interest a day Multiply the invoice amount by the annual rate, then divide by 365. On a $4,400 invoice at 12 per cent, that is about $1.45 a day.
Multiply by the days late The result before rounding can carry fractions of a cent, and the tool shows it so you can see what the rounding did.
Round to the nearest cent Interest is money, so it lands on cents. The tool rounds once, at the end, and adds that figure to the invoice amount.

A worked example you can check

Step	Working	Result
Invoice amount	Entered on the tool	$4,400.00
Rate	From the terms, as a yearly figure	12 per cent
Interest a day	$4,400.00 x 12% / 365	$1.4466
Days late	Due 1 August 2026, paid 30 September 2026	60 days
Interest	$1.4466 x 60 days	$86.7945
Rounded	To the nearest cent	$86.79
Amount now payable	$4,400.00 + $86.79	$4,486.79

If you would rather use a spreadsheet

The same arithmetic fits on one line of any spreadsheet: the invoice amount in one cell, the annual rate in the next, and the days late in a third. The interest a day is the amount multiplied by the rate and divided by 365, and the interest for the period is that figure multiplied by the days late. There is nothing to download from this page, because the formula is the whole tool, and the calculator above will check your figures against it.

What counts as an unreasonable rate

An interest rate can be unenforceable for two reasons. It can be a penalty rather than a genuine estimate of what being paid late costs you, in which case a court can decline to enforce it. Or it can be an unfair contract term: a term in a standard form small business contract can be declared void if it causes a significant imbalance between the parties and is not reasonably necessary to protect the legitimate interests of the business relying on it. A very high default rate invites both arguments.

No published number separates a reasonable rate from an unreasonable one. A rate pitched around what an overdraft or a merchant facility costs your business is a position you can explain. A rate pitched at consumer credit card levels is not.

What to watch out for

Part payments. If half the invoice arrived three weeks ago, the interest on that half stopped then. Calculate the periods separately.
Agreed payment plans. If you have given the client a new date, the old due date is no longer the one to count from.
Compounding. Interest on interest is a larger claim and most small business terms do not say it. This calculator does not compound.
Fixed late fees and GST on interest. A flat fee needs its own clause, and whether GST applies to interest is one for your accountant. Nothing here adds either one.
A leap year. The tool uses a 365 day year for every period, so each calendar day counts as one day.

The honest limits of this tool

It does arithmetic and nothing else. It cannot tell you whether your contract allows interest at all, and it does not read your terms.
It will happily calculate a rate nobody should charge. Judging the rate is your job.
It does not promise that the interest will be paid, or that the invoice will be recovered. Interest is an amount you may add to a request for payment.
It does not handle part payments, credits, settlement discounts or payment plans. Those need the calculation split into periods.
It is not legal or tax advice. If the amount is large, or the client is disputing the invoice, get advice before you put interest in a demand.

Interest is the last line of the letter, not the first

Interest on a normal invoice is a small number next to the invoice itself, and the work that gets an invoice paid happens earlier. The invoicing app at paychasey.com.au does that part on its own: the invoice carries your ABN with the GST worked out, the client gets a PDF and a payment link, card payments land in your own account with your payment provider, and reminders go out at 3, 10, 21 and 35 days after the due date and stop the moment the invoice is paid. Three invoices a month are free with no card, and $29 a month covers 1,000 invoices a month.

Want the reminders to go out before interest is ever a question?

Start free

Questions people ask

Is there a set rate of interest for late payments in Australia?: No. There is no single national rate for business invoices, and no rate applies to an invoice unless your contract or your terms of trade put one there. Choose the rate when you write the terms, not when an invoice goes unpaid, and keep it close to what being without the money actually costs your business.
Which day do I start counting from?: From the day after the due date. A payment made on the due date is on time and attracts nothing. The tool counts calendar days, including weekends and public holidays, which is how most interest clauses are written. If your clause says something different about the counting, follow your clause rather than this page.
Can I charge interest if my terms say nothing about it?: Do not. Without a clause in the contract or in the terms you sent with the invoice, there is no agreed rate to apply, and an invoice that adds interest with nothing behind it is easy to dispute. Put the clause in your terms first, then use it on the next job. business.gov.au puts the same condition on interest in a letter of demand.
Simple interest or compound interest?: Simple interest on the unpaid amount, from the due date to the date of payment, is what a plain interest clause describes and what this calculator does. Compounding needs a clause that says so, produces a much larger figure than most people expect, and invites a harder argument if the invoice is ever tested.
Can a court reduce the interest I charge?: A court can decline to enforce a rate it treats as a penalty rather than a genuine estimate of loss, and under the unfair contract terms law a term in a standard form small business contract can be declared void. A rate roughly equal to what the unpaid money costs you is far easier to defend than one that punishes the client.
Does the calculator add anything to the amount I can claim?: No. It works out simple interest on the amount you enter and nothing else. Late fees, debt collection costs, admin charges and any GST on the interest are all separate questions, and each one needs its own clause before you can claim it.