What is the current statutory interest rate in Australia?

Statutory post-judgment interest rates are set by each state's Supreme Court. As at 2025, the rate is 10% per annum in NSW, VIC, QLD, and ACT. These rates change periodically — check the relevant court rules for the current rate before relying on them.

Can I charge interest on a B2B invoice without it being in my terms?

No. You can only charge contractual interest if your credit agreement or invoice terms expressly include an interest clause. Without one, interest can only be claimed after a judgment is obtained, at the statutory rate set by the court.

What is the difference between simple and compound interest?

Simple interest is calculated on the original principal only: Interest = Principal × Rate × Time. Compound interest (daily compounding) is calculated on the principal plus previously accrued interest — it results in a higher total over long periods.

Do I include interest in my letter of demand?

You should include interest only if your terms give you the contractual right to charge it. If in doubt, state the face value of the invoices and note that interest is accruing in accordance with your credit terms.

Free calculator

Late Payment Fee Calculator

If your credit terms include a late payment interest clause, this calculator tells you exactly how much interest has accrued on an overdue invoice. It includes the current statutory interest rates for NSW, VIC, QLD, and ACT courts, which apply when the matter proceeds to judgment.

Invoice details

Invoice amount (AUD)

Days overdue

days

Interest rate type

Annual interest rate (%)

% p.a.

Calculation method

Simple interest: amount × rate × days ÷ 365

Statutory interest rates in Australia

When a court judgment is entered, interest accrues on the outstanding amount at the rate prescribed by the relevant court legislation. In NSW, VIC, QLD, and ACT, the prescribed rate has historically been set at 10% per annum, though this can be varied by regulation. Always confirm the current gazette rate before relying on these figures for litigation purposes.

For contracted late fees to be enforceable, they must be clearly stated in your credit terms and accepted in writing by your customer before the debt was incurred.

This calculator is for illustrative purposes only — not financial or legal advice. Statutory rates shown are indicative and may have changed. Seek legal advice before claiming penalty interest or late fees in a formal demand or court proceedings.

Contracted vs statutory interest

There are two types of interest relevant to overdue invoices. Contracted interest is whatever your credit terms specify — it can be higher or lower than the statutory rate and is enforceable pre-judgment provided your terms clearly include it and the customer agreed to them. Statutory interest is awarded by courts on judgments and is generally 10% per annum across NSW, VIC, QLD, and ACT, which are the four states Merion primarily serves.

Can I actually charge late payment interest?

Only if your credit agreement expressly includes a late payment interest clause, or penalty interest rate, and the customer acknowledged those terms before the sale. Without a contractual basis, you cannot invoice for pre-judgment interest. You can, however, claim statutory interest once a judgment is obtained — Merion pursues this where applicable.

Adding interest to a letter of demand

If you have a contracted interest clause, you may include accrued interest in your letter of demand and claim it as part of the total outstanding. If you do not have a contractual interest clause, limit your demand to the invoice face values. Merion can then pursue statutory interest through court proceedings if the debtor continues to ignore the demand. For interest calculations on specific debts, use the Interest Calculator.

Note: statutory interest rates change periodically. Verify the current rate for your state's court before relying on any figure shown here.

This is an indicative calculation only — not financial or legal advice. Statutory interest rates are subject to change. Late payment interest is only enforceable where expressly provided for in your credit terms or awarded by a court. Seek legal advice for your specific circumstances.

Recover the full amount

Merion pursues the debt and the interest.

Commission-only recovery — no recovery, no fee. We pursue the full outstanding balance including any applicable interest.

Refer a debt Letter of demand template

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