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Simple Interest / Late Fee Calculator
Calculate interest owed on a balance using a simple annual rate over days, months, or years.
How simple interest is calculated
Simple interest = principal × (annual rate ÷ 100) × time in years. Days convert to years by dividing by 365, months by dividing by 12. This is simple interest — it doesn't compound, which matches how most flat late fees and short-term invoice interest are calculated.
Example: a $1,000.00 invoice at a 12% annual rate, 30 days overdue, accrues about $9.86 in interest, for a $1,009.86 total.
This is different from most credit card interest, which compounds daily or monthly instead of staying simple — use this calculator for late fees and short-term invoice interest, not to model a revolving balance. Example: a $2,500.00 invoice at an 8% annual rate, 3 months overdue, accrues $50.00 in interest.
A commonly cited B2B late-fee practice is 1–2% per month (roughly 12–24% annualized), though some states cap late fees around 5% per month with grace-period rules, per QuickBooks' guidance for small businesses. Interest rate caps vary by state and this tool doesn't apply one for you, so check that whatever rate you enter is actually legal to charge.