Enter the overdue amount, the annual rate in your contract or terms, and the number of days late.
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Late payment interest or fees should be stated in your contract or invoice terms before the invoice is issued. This calculator uses simple interest: amount × annual rate × days ÷ 365. Check the wording of your agreement and the applicable law before billing a customer.
Interest = invoice amount × annual rate ÷ 100 × days overdue ÷ 365 (simple interest).
VAT treatment of late-payment charges depends on the nature of the charge. Ask a tax adviser how to treat it on your invoices.