What is statutory interest?
Statutory interest is interest that a court may award on a judgment debt. It is set by legislation and court rules in each jurisdiction — not by your invoice or credit terms. It is separate from any contractual interest clause you may have in your credit agreement.
Statutory interest can be awarded in two forms:
- Pre-judgment interest — interest for the period before judgment is entered, usually running from the date the debt fell due. Courts have a discretion to award this in most Australian jurisdictions.
- Post-judgment interest — interest that runs automatically from the date of judgment until the debt is paid. This is awarded as a matter of course in most Australian courts.
Statutory interest rates by jurisdiction (as at 2025)
| Jurisdiction | Governing legislation | Rate (p.a.) | Calculated from |
|---|---|---|---|
| New South Wales | Supreme Court Act 1970 s100 / UCPR r36.7 | 10.0% | Date debt fell due (pre-judgment at court's discretion) |
| Victoria | Supreme Court Act 1986 s60 | 10.0% | Date of judgment (pre-judgment at court's discretion) |
| Queensland | Civil Proceedings Act 2011 s58 | 10.0% | Date debt fell due (at court's discretion) |
| ACT | Civil Law (Wrongs) Act 2002 s47 | 10.0% | Date debt fell due (at court's discretion) |
| Federal (all states) | Federal Court Rules 2011 r37.01 | Set annually — check Federal Court website | Date of judgment |
Note: statutory interest rates can be varied by regulation. Verify the current rate with the relevant court registry or the court's published practice notes before filing a claim.
Pre-judgment vs post-judgment interest
Post-judgment interest runs automatically from the date a judgment is entered until the judgment debt is paid in full. In most Australian courts it accrues at the prescribed statutory rate and the creditor does not need to do anything extra to claim it.
Pre-judgment interest covers the period from when the debt fell due to the date of judgment — often a much longer period. Courts have a discretion to award this, and it is not automatic. To have a realistic chance of an award, you must: (a) specifically claim pre-judgment interest in your originating process or statement of claim; (b) identify the period for which interest is claimed; and (c) provide the calculation. If you do not claim it, the court cannot award it.
Does statutory interest apply automatically?
Post-judgment interest applies automatically in most Australian courts once judgment is entered. Pre-judgment interest does not — you must specifically claim it. Check the originating process rules for the court in which you are filing to confirm what you need to include.
For Magistrates Court claims (which handle most commercial debts under the relevant threshold in each state), the claim form will typically include a field for interest claimed. Do not leave it blank.
Contracted interest vs statutory interest
If your credit terms include a contracted interest clause (e.g., "interest at 18% per annum on overdue amounts"), you can claim that contracted rate in your proceedings — even if it is higher or lower than the statutory rate — provided:
- The customer agreed to the clause in writing before the debt arose; and
- The clause clearly states the rate and the method of calculation.
If you have a contracted rate, claim it — do not default to the statutory rate, which may be lower. If you have no contracted rate, you can still claim statutory interest from the date the debt fell due, provided you plead it correctly.
How Merion uses statutory interest in recovery
When Merion pursues a debt through court on your behalf, interest is claimed from the date the debt fell due. This means the total amount owed to you grows each day the debtor delays. For a debtor who is weighing up whether to pay or contest a debt, understanding that interest is compounding every day is often a powerful incentive to settle promptly.
For debtors who dispute a debt, the prospect of being ordered to pay a higher amount (including interest and costs) if they lose at trial is a significant factor in settlement negotiations.
Related tools: Late payment fee calculator · Interest calculator