Free Australian late payment interest calculator for overdue invoices. Enter the unpaid invoice amount, your agreed annual interest rate, the invoice due date and the date it was paid (or today if it is still outstanding) to instantly see the number of days overdue, the interest accrued, and the total amount now owed. Choose simple interest or daily-compounding interest and add an optional flat late fee. A guide only — you can charge interest or fees only when your invoice payment terms allow it.
The outstanding amount the interest is charged on.
The per-year rate set in your invoice terms (e.g. 10%).
Leave as today if still unpaid.
A fixed admin fee, if your terms allow one.
Days Overdue
—
Enter a due date
Interest Accrued
$0.00
Simple interest
Total Now Owed
$5,000.00
Amount + interest + fee
Guide only. You can charge interest or a late fee only if your agreed payment terms allow it. Set your late-payment terms in your invoice T&Cs.
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When a customer pays an invoice after its due date, you can charge interest on the outstanding amount — but only if your payment terms allow it. There is no single legislated commercial late-payment rate in Australia, so the rate and any flat fee are whatever you have agreed with the customer in your contract, quote, or invoice terms and conditions. The key rule is that the interest and fees must be set out before the work is done and must be reasonable, not a penalty.
First, work out how many days the invoice is overdue — the number of days from the day after the due date until it is paid (or today, if it is still unpaid). Then apply your annual interest rate:
Worked example. A $5,000 invoice is paid 30 days after the due date, with a 10% per-year rate agreed in your terms. Using simple interest: $5,000 × 0.10 × 30 ÷ 365 = $41.10. Using daily compounding the figure is a little higher at $41.27. Add a $15 flat late fee and the customer owes $5,000 + $41.10 + $15 = $5,056.10.
Simple interest charges the same amount each day based on the original unpaid balance. Daily-compounding interest adds each day's interest to the balance before charging the next day, so it grows slightly faster over time. Most small-business invoice terms use simple interest because it is easier to explain and to defend. Whichever you use, state it clearly on your invoices.
To be able to charge interest or a fee, write the term into your standard invoice conditions — for example: “Overdue accounts may incur interest at 10% per annum, calculated daily from the due date.” Always show clear payment terms and a due date on the invoice itself. You may also want to check that your invoice meets the tax invoice requirements in Australia and, if you are registered for GST, use the GST calculator to confirm the GST on the original amount. The fastest way to avoid late payments is to send a clear invoice with a pay-now link — you can create one with our free invoice generator.
This calculator is a guide only. Whether you can actually charge interest or a late fee — and at what rate — depends on the payment terms you agreed with your customer. Set your late-payment terms in your invoice T&Cs and seek professional advice for disputed debts.
Yes — a business can charge interest on a late-paid invoice, but only if your payment terms allow it. The right to charge interest (and the rate) must be set out in your contract, quote, or invoice terms and conditions before the work is done. If you have not agreed a late-payment term with the customer, you generally cannot add interest after the fact. Make sure your standard invoice T&Cs state the interest rate and when it starts accruing.
There is no single legislated commercial late-payment rate in Australia, so the rate is whatever you have set in your payment terms (commonly 8%–12% per year, or sometimes the court's pre-judgment interest rate plus a margin). The rate you choose should be reasonable rather than a penalty — courts can refuse to enforce a rate that looks punitive. A common approach is to peg it to the Reserve Bank cash rate plus a fixed margin, and to state the exact percentage on every invoice.
Simple interest is the unpaid amount multiplied by the annual rate, multiplied by the number of days overdue, divided by 365. For example, $5,000 overdue by 30 days at 10% per year is $5,000 x 0.10 x 30 / 365 = $41.10. Daily-compounding interest adds each day's interest to the balance before charging the next day, so it grows slightly faster: $5,000 x ((1 + 0.10/365)^30 - 1) = $41.27. Most small-business invoice terms use simple interest.
An invoice becomes overdue the day after its due date — the payment date stated on the invoice (for example, 'Net 14' means due 14 days after the invoice date). Interest, if your terms allow it, generally starts accruing from the first day after the due date, not from the invoice date. This calculator counts the days between the due date and the date the invoice was paid (or today if it is still unpaid).
You can add a fixed late-payment administration fee on top of interest if — and only if — that fee is set out in your agreed payment terms. As with interest, the fee must be a genuine pre-estimate of your costs rather than a penalty, or a court may not enforce it. Many businesses use a small flat fee (for example $10–$25) to cover the cost of chasing payment, plus a modest interest rate for the time the money is outstanding.
Set clear payment terms up front, state them on every quote and invoice, and make paying easy with online card or bank payment links. Shorter terms (7–14 days), automated payment reminders before and after the due date, and deposits or progress payments on larger jobs all reduce overdue invoices. OneBookPlus can send invoices with built-in pay-now links and automatic reminders so you spend less time chasing money.
Sources & methodology
This tool counts the whole days between an invoice's due date and the date it was paid (or today, if unpaid), then applies the annual interest rate you enter. Simple interest = unpaid amount x rate x days / 365. Daily-compounding interest = unpaid amount x ((1 + rate / 365) ^ days - 1). Any flat late fee you enter is added on top. Figures are computed in your browser — nothing you enter is stored or sent to a server. You can only charge interest or fees when your agreed payment terms allow it.
Authoritative sources
Reviewed by Bishal Shrestha — Founder of OneBookPlus, 10+ years building tools with Australian tax-agent and BAS-agent practices. Last reviewed and updated: June 2026.
Disclaimer: This tool provides estimates only and is not professional advice. For decisions that affect your tax, finances, or compliance position, consult a registered professional.
Turn this into a branded, GST-compliant tax invoice with a Pay Now link. OneBookPlus emails it, chases it with reminders, and marks it paid automatically.
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