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How much can I charge as a late payment fee?

Under the Contract and Commercial Law Act, the default recovery fee ranges from $90 to $250 depending on the invoice amount. You can also specify your own fee in your terms of trade.

How is interest on overdue invoices calculated?

Interest is calculated on a daily basis: invoice amount × (annual rate ÷ 365) × days overdue. For example, a $1,000 invoice 30 days overdue at 12% annual interest = $1,000 × (0.12 ÷ 365) × 30 = $9.86 interest.

When does an invoice become overdue?

An invoice becomes overdue the day after its due date. If you specified 'payment within 14 days' on the invoice, it becomes overdue on day 15.

Do I need to specify late payment terms in my contract?

Yes. To legally charge interest and late fees, your terms of trade or contract should specify the interest rate, late fee, and when they apply. Without these terms, recovery is more difficult.

What if the client still won't pay?

If a client refuses to pay, you can use a debt collection agency, take them to the Disputes Tribunal (for amounts up to $30,000), or file a claim in the District Court. A lawyer or debt collection professional can advise on the best approach.

Business Tools/Invoice & Late Payment Calculator

Interest · Recovery Fees

Invoice & Late Payment Calculator

Calculate interest and late payment fees on overdue invoices. See exactly how much a client owes you for late payment.

Invoice & Late Payment

Interest + recovery fee

Invoice amount

Days overdue

Late fee

Annual interest rate (%)

Original invoice

$0.00

Interest accrued

$0.00

Late payment fee

$90.00

Total owed

$90.00

Rates valid for 2025/26 tax year · Last reviewed August 2025

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Late payment of invoices in New Zealand

Under the Contract and Commercial Law Act 2017, New Zealand businesses can charge interest and recovery fees on overdue invoices, provided the terms were agreed in the original contract or invoice.

The default interest rate is typically set at 10% above the Reserve Bank Official Cash Rate (OCR), but you can specify your own rate in your terms of trade. A common rate is 12% per annum.

A late payment fee (also called a recovery fee or debt collection fee) compensates you for the cost of chasing the debt. Under the Act, the default fee ranges from $90 to $250 depending on the invoice amount.

This calculator shows the interest accrued (based on the daily rate × days overdue), the late fee, and the total amount owed including the original invoice.

Invoice & Late Payment Calculator frequently asked questions

Yes. Under the Contract and Commercial Law Act 2017, you can charge interest on overdue invoices if your terms of trade specify it. The default rate is 10% above the Reserve Bank OCR, but you can set your own rate.