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Small Business Penalty Interest Calculator — How It Works

Small Business Penalty Interest Calculator

Small Business Penalty Interest Calculator — How It Works

Calculates the penalty interest owed by a small business on an overdue amount based on the annual interest rate and number of days overdue.

How it works

  1. Enter the overdue amount (principal).
  2. Enter the annual interest rate as a percentage.
  3. Enter the number of days the payment is overdue.
  4. The tool calculates simple daily interest: principal × (rate ÷ 100) × (days ÷ 365).

Formula

Penalty interest = Principal × (Annual rate ÷ 100) × (Days overdue ÷ 365)
Total due = Principal + Penalty interest

Example

$1,000 overdue for 30 days at a 12% annual rate accrues about $9.86 in penalty interest, for a total of $1,009.86.

Notes

Many jurisdictions cap the penalty interest rate that can be charged on overdue rent, invoices, or contracts. Check your contract terms and local law for the maximum allowable rate.

Try the Small Business Penalty Interest Calculator — instant results in your browser, no sign-up.

FAQ

Is this free?

Yes — the Small Business Penalty Interest Calculator runs entirely in your browser, no sign-up required.

No. This tool provides general estimates for planning purposes only and is not a substitute for advice from a qualified lawyer, accountant, or official government source.