Late payment interest calculator
Late payment interest = invoice amount × annual rate × days overdue ÷ 365. A AED 50,000 invoice paid 75 days late at 9% a year carries about AED 925 of interest. Interest can only be charged if your contract or terms of business provide for it.
Reviewed by Countify's ACCA/FCCA chartered certified accountants · Updated
- Interest per day
- AED 12.33
- Interest due
- AED 924.66
- Amount to claim
- AED 50,924.66
Charge interest only if your contract or terms allow it. Late payment interest is outside the scope of VAT, and unpaid invoices over 6 months old may qualify for VAT bad debt relief.
Results are estimates for general information, not tailored advice.
Interest on a AED 50,000 invoice at 9%
Simple interest on the overdue amount.
| Days overdue | Interest due | Amount to claim |
|---|---|---|
| 30 | AED 369.86 | AED 50,369.86 |
| 90 | AED 1,109.59 | AED 51,109.59 |
| 180 | AED 2,219.18 | AED 52,219.18 |
Chasing early is cheaper than litigation: put interest terms on every invoice.
Getting paid faster
Put payment terms and late interest on every invoice and contract, chase on day one, and stop work for persistent late payers. If an invoice stays unpaid for 6 months and you write it off, you can reclaim the VAT with bad debt relief.
Frequently asked questions
Is VAT charged on late payment interest?
No. Late payment interest is generally outside the scope of UAE VAT.
Bookkeeping and management accounts
Monthly bookkeeping in Xero, Zoho Books or QuickBooks with management accounts you can run the business on, for a fixed fee.