This overdue invoice interest calculator works out the interest accrued on an unpaid invoice using your own contract rate, plus any admin fee, to give you the total owing. It's a free late payment interest calculator built for NZ tradies, contractors and small businesses chasing slow payers.
Daily interest = amount × (rate ÷ 100) ÷ 365. In New Zealand there is no automatic right to charge interest on an overdue commercial invoice — you can only charge it if your contract or written payment terms allow it, so enter your own agreed rate above. Figures are estimates only — confirm against your terms of trade or your accountant.
Here is the part most online tools get wrong: in New Zealand there is no automatic statutory right to charge interest or a penalty on an overdue commercial invoice. You can only charge default interest if your contract or written payment terms expressly allow it. If your terms of trade are silent on interest, you generally cannot add it unilaterally — which is exactly why this is a user-input rate and not a fixed number. That makes this both a penalty interest calculator and a default interest calculator for NZ: you supply the rate your customer agreed to.
That is separate from interest a court or the Disputes Tribunal may award. Under the Interest on Money Claims Act 2016, if your unpaid invoice ends up as a money claim in court or the Disputes Tribunal, interest may be awarded at a prescribed rate set by regulation. That is a different mechanism from the default interest you charge under your own terms — do not assume one universal percentage applies to both.
There is no fixed legal rate. You can charge whatever annual rate your contract specifies, as long as it is a genuine reflection of your costs rather than an unenforceable penalty. The best protection is to set a clear default interest rate up front — see our guide on setting payment terms that protect your trade business and the detail in charging interest on overdue invoices in NZ.
The calculator uses simple daily interest. The daily interest is the invoice amount × (your annual rate ÷ 100) ÷ 365. Multiply that by the days overdue to get the interest accrued, then add the principal and any admin or recovery fee to reach the total owing. It works as a quick late payment fee calculator and a way to calculate interest on an unpaid invoice before you send a reminder or a final notice.
If the figure above is climbing and the client still has not paid, escalate calmly. Generate a firm, compliant final notice with our free NZ letter of demand template as the next step. Know where you stand first by reading your legal rights when chasing unpaid invoices in NZ. For smaller debts, the Disputes Tribunal is a low-cost option and interest may be awarded on top of the principal.
Only if your contract or written payment terms expressly allow it. New Zealand has no automatic statutory right to charge interest (or a penalty) on overdue commercial invoices — the right comes from your terms of trade. If your terms state a default interest rate, you can charge it; if they are silent, you generally cannot add interest unilaterally.
There is no fixed legal rate. You can charge whatever rate your contract specifies, provided it is a genuine reflection of your costs and not an unenforceable penalty. Many NZ trade businesses set a default interest rate in their terms (for example a stated annual percentage). Enter your agreed rate into the calculator above.
This penalty interest calculator uses simple daily interest: daily interest = invoice amount × (annual rate ÷ 100) ÷ 365. Multiply that by the number of days overdue to get the interest accrued, then add the principal and any admin or recovery fee to get the total owing.
It governs interest that a court or the Disputes Tribunal may award on a money claim. If your unpaid invoice ends up in court or the Disputes Tribunal, interest may be awarded at a prescribed rate set by regulation — this is separate from any default interest you charge under your own contract.
Send a clear final notice. Our free Letter of Demand generator creates a firm, compliant final-notice letter, and you can then consider the Disputes Tribunal (for claims up to $60,000) or debt recovery. Always confirm your position with a professional before escalating.