Canadian invoice interestcalculator

How this calculation works

Simple interest = unpaid principal × annual rate ÷ 100 × days ÷ 365. We use a fixed 365-day year, do not compound interest and round the displayed result to cents. With $2,500 outstanding at 18% for 60 days, the estimate is $73.97. Another 30 days adds $36.99, rather than one-twelfth of a year.

If the customer paid partway through, calculate each period separately using the balance outstanding in that period, then add the interest amounts. This tool does not calculate tax on fees, flat penalties, grace periods, court interest or an effective borrowing APR.

Can I charge this amount in Canada?

The result alone cannot answer that. Section 4 of the federal Interest Act generally requires an equivalent yearly rate in a written contract quoting interest for a period shorter than a year; otherwise recovery above 5% per year is restricted, subject to the provision’s exceptions. A monthly rate and a compounded effective annual rate are not interchangeable.

Do not rely on the old blanket “60% limit.” The general criminal interest threshold changed to 35% APR on January 1, 2025. Applicability, agreement dates, included charges and exemptions matter. Neither 35% nor this calculator’s input range is a recommended or automatically permitted invoice rate. Get advice on disputed or unusual charges.

Interest or a payment plan?

When the customer accepts the invoice but cannot pay at once, discuss a schedule before adding more charges. RemitRight’s optional plan fee is separate from this interest estimate. It is disclosed to the customer before checkout, not automatically added by this calculator.

Understand the three- and five-month plans · What to do when a customer won’t pay

Sources and scope

Updated September 10, 2026 by RemitRight. General information, not an assessment of your contract.

• Interest Act, section 4 — yearly-rate disclosure
• Canada Gazette — January 1, 2025 commencement
• Criminal Interest Rate Regulations — exemptions and scope