Late Payment Interest Calculator

Calculate interest on overdue invoices using MSME SAMADHAAN rates (3× RBI bank rate) or a custom rate. Know what you're owed.

Invoice Details

Invoice / Principal Amount (₹)

Invoice Due Date

Payment Date (or Today)

Interest Rate Method

As per the MSMED Act 2006, interest on delayed payments to MSMEs accrues at 3× the RBI bank rate (approx. 21% p.a.). Applicable when buyer is not an MSME.

271 Days Overdue

At 21% per annum (MSME SAMADHAAN rate)

Principal Amount₹2,50,000

Interest Accrued (271 days)₹38,979

Total Amount Recoverable

₹2,88,979

Daily interest: ₹144 per day

About the late payment interest calculator

When a customer pays late, the delay has a real cost. This calculator works out the interest on an overdue invoice from the amount, the due date, the payment date and the interest rate, so you can quote an exact figure when you follow up. It is also useful in the other direction, for checking what you may owe on your own overdue bills.

How to use it

Enter the invoice amount and the date payment was due.
Enter the date the payment was actually made, or today if it is still pending.
Set the annual interest rate that applies to your agreement.
Read the number of days overdue, the interest amount and the total payable.

Tips

Agree the rate in writing. State the late payment interest rate in your quotation or contract. It is far easier to collect when the customer has already accepted it.
Know the MSME rule. For micro and small enterprise suppliers, the MSMED Act sets interest at three times the bank rate notified by the RBI, compounded monthly, when payment is delayed beyond the agreed period or 45 days.
Track overdue invoices early. Interest is easy to claim on day 10 and awkward on day 120. An aging report shows which invoices are slipping.

Frequently asked questions

How is late payment interest calculated?: Simple interest is amount multiplied by annual rate multiplied by days overdue, divided by 365. Some agreements and the MSMED Act use compound interest, so check which applies to you.
What interest rate should I charge?: Use the rate in your contract. If there is none, common practice is between 12 and 24 percent a year. MSME suppliers can rely on the statutory rate.
Is the calculator free?: Yes, it is free with no signup.
Can I add the interest to a new invoice?: Many businesses raise a separate debit note for the interest. Check with your accountant how to treat it for GST.