Late Payment Interest Calculator (Invoices)
Calculate interest on an overdue invoice using your contract rate or the Interest Act's 5% default, with the CRA prescribed rate shown for reference.
Total amount due
$5,000
Days overdue0
Interest accrued$0
Statutory rate applied7.0%
What you can legally charge on an overdue invoice in Canada
Canada has no single national statutory interest rate for business-to-business late payments the way some other countries do — what you can charge on an overdue invoice depends first on what your contract says, and only falls back to a default 5% annual rate under the federal Interest Act if the contract is silent on the point.
How late-payment interest actually works in Canada
- If your contract specifies an annual interest rate for late payment, that rate applies, provided it doesn't breach the criminal-rate cap on interest charged in a contract
- If the contract is silent on interest, the federal Interest Act's default of 5% per year applies instead of nothing
- The CRA's own prescribed interest rate, 7% per year and unchanged through the first three quarters of 2026, is shown for reference only; it applies to overdue tax debts, not to what you can charge a client on a private invoice
