Free calculator
Late interest calculator
Enter the overdue amount, the yearly rate and how many days late it is. Without an agreed rate, the prescribed rate applies.
Prescribed rate: 10.5%
Interest
R 172,60
- Overdue amount
- R 10 000,00
- Interest: 60 days at 10.5% a year
- R 172,60
- New amount due
- R 10 172,60
Without an agreed rate, interest runs at the prescribed rate. For consumers, the National Credit Act limits what you can charge (2% a month at most), and only if they agreed to it upfront. Interest is exempt from VAT.
Invoice this interestHow the interest is worked out
Simple interest by the day: amount × yearly rate × days ÷ 365. R10,000 at 10.50% for 60 days is R172.60.
The prescribed rate is the repo rate plus 3.5 percentage points, under the Prescribed Rate of Interest Act. It is 10.50% a year from 1 July 2026 and 10.75% from 1 November 2026.
Interest stops growing once the unpaid interest equals the amount owed (the in duplum rule).
Business clients and consumers
- Between businesses, you can agree your own rate in your terms; without one, the prescribed rate applies from the due date.
- For consumers, the National Credit Act allows interest only if you told them and they accepted it beforehand, at no more than 2% a month.
- Interest you charge on a late payment is not subject to VAT.
Last updated 2026-10-01. This calculator is a guide, not tax advice.
Frequently asked questions
What is the prescribed rate of interest now?
10.50% a year from 1 July 2026, rising to 10.75% from 1 November 2026, after the Reserve Bank raised the repo rate to 7.25% in September.
Can I charge interest if my invoice didn’t mention it?
For a business client, yes, at the prescribed rate from when payment was due. For a consumer, no: interest has to be disclosed and accepted upfront.
Do I charge VAT on late interest?
No. Interest is a financial service, which is exempt from VAT, so invoice it without VAT.