Do I need a clause in my contract to charge this?

Effectively yes. Pennsylvania has no automatic statutory right to add interest to a private commercial invoice — your contract or terms of trade should specify the rate. Without one, you are limited to the default legal rate (6% per year) on liquidated debts, typically only recoverable once you pursue the claim.

How is late payment interest calculated?

Simple interest on a daily basis: invoice amount × (annual rate ÷ 365) × days overdue. Interest normally runs from the day after the due date. The calculator above shows the formula with your own numbers.

Can I really send an invoice for the interest?

Yes — the standard practice is a short statement or updated invoice showing the principal, the daily interest accrued to date and the legal basis (41 Pa. Stat. §202). Many creditors find the demand itself prompts payment. This site provides information, not legal advice; for significant sums, confirm your position with a professional before escalating.

Late Payment Interest in Pennsylvania (2026)

6% per year — 41 P.S. §202: legal rate of interest is 6% per year where no rate is agreed; applies to overdue liquidated contract debts. On a $5,000 invoice 60 days overdue, the money already owed to you looks like this:

Total owed on a $5,000 invoice · 60 days late

$5,049.32

Growing $0.82 every day it stays unpaid

principal: $5,000
interest: $49.32

Rate verified 2026-07-06 · Source: Pennsylvania General Assembly — Act 6 of 1974 · Methodology

Calculate your invoice

Rate prefilled from the Pennsylvania default (6% per year) — override it if your contract sets its own.

Invoice amount

Due date

60 days overdue

Annual rate

Pennsylvania default: 6% per year

Total now owed to you · Pennsylvania

$5,049.32

$5,000 principal · 60 days overdue at 6%

interest accrued: $49.32
growing daily by: $0.82

Simple interest: amount × (6% ÷ 365) × 60 days. Information, not legal advice — contract terms can override statutory defaults.

The rule in plain English

Pennsylvania’s legal rate of interest is 6% per year. Where a contract is silent on interest, an overdue fixed sum (like an unpaid invoice) accrues simple interest at 6% from the due date.

Pennsylvania courts treat pre-judgment interest on contract debts as a matter of right for liquidated amounts.

Judgments likewise bear interest at the 6% legal rate.

A written agreed rate governs instead; for ordinary business-to-business transactions above $50,000, parties can agree rates without the 6% usury ceiling that applies to small personal loans.

Legal basis: 41 Pa. Stat. §202.

Worked example

invoice = $5,000, 60 days overdue, rate = 6.00%

daily interest = $5,000 × (6.00% ÷ 365) = $0.82

interest = $0.82 × 60 days = $49.32

total owed = $5,049.32

What to include in your demand letter

A short, factual letter recovers more invoices than a heated one. Checklist (general guidance, not legal advice):

Invoice number, date, original due date, and the exact principal outstanding.
The interest calculation shown line by line — principal, rate (6% per year), days overdue, daily amount — so there is nothing to dispute.
The legal or contractual basis for the interest (41 Pa. Stat. §202; cite your contract clause first if you have one).
A single clear deadline (7 or 14 days is customary) and the payment details — remove every excuse for delay.
What happens next if unpaid: a letter before action, small claims / court filing, or referral to collections — stated plainly, without threats you don’t intend to keep.
A note that interest continues to accrue daily until payment — quote the per-day figure from the calculator above.

FAQ

What interest can I charge on a late invoice in Pennsylvania?: 41 P.S. §202: legal rate of interest is 6% per year where no rate is agreed; applies to overdue liquidated contract debts. On a $5,000 invoice 60 days overdue, that is about $49.32 in interest. (41 Pa. Stat. §202; verified 2026-07-06.)
Do I need a clause in my contract to charge this?: Effectively yes. Pennsylvania has no automatic statutory right to add interest to a private commercial invoice — your contract or terms of trade should specify the rate. Without one, you are limited to the default legal rate (6% per year) on liquidated debts, typically only recoverable once you pursue the claim.
How is late payment interest calculated?: Simple interest on a daily basis: invoice amount × (annual rate ÷ 365) × days overdue. Interest normally runs from the day after the due date. The calculator above shows the formula with your own numbers.
Can I really send an invoice for the interest?: Yes — the standard practice is a short statement or updated invoice showing the principal, the daily interest accrued to date and the legal basis (41 Pa. Stat. §202). Many creditors find the demand itself prompts payment. This site provides information, not legal advice; for significant sums, confirm your position with a professional before escalating.

This page is general information about Pennsylvania, verified 2026-07-06 against Pennsylvania General Assembly — Act 6 of 1974. It is not legal advice, and statutory rules have exceptions and transition rules that a short summary cannot capture. Contract terms often override statutory defaults. For significant or disputed sums, consult a qualified professional in your jurisdiction.

Other jurisdictions

← Late payment interest calculator (all jurisdictions)