Delay Compensation

Late Payment Interest Calculator

Calculate late payment damages on overdue invoices based on the annual interest rate and number of days overdue. Useful for demand letters and accounts receivable management.

Late Payment Interest in Japan

In Japan, when a debtor fails to pay by the due date, the creditor is entitled to charge late payment damages (遅延損害金 / Chien Songaikin). The applicable interest rate depends on the legal relationship between the parties:

3% (Civil Code, Art. 404): The statutory rate since April 2020 (revised every 3 years). Applies when no rate is specified in the contract.
6% (Former Commercial Code): The old statutory rate for commercial transactions before the 2020 Civil Code reform. Still referenced in some legacy contracts.
14.6% (Subcontract Act): A mandatory rate under the Act against Delay in Payment of Subcontract Proceeds. When a principal contractor delays payment to a subcontractor, this rate applies by law regardless of any contractual agreement.

Late payment interest is calculated as: Principal × Annual Rate × Days Overdue ÷ 365. The count starts from the day after the due date.

Calculate Late Payment Interest

Principal (unpaid amount, ¥)

Annual Rate

Custom Rate (%)

Payment Due Date

Calculation Date

Days Overdue - days

Applied Rate 3 %

Late Payment Interest ¥0

Total Claim (Principal + Interest) ¥0

About This Tool

When a business partner fails to pay by the due date, the creditor can claim late payment damages. This tool automatically calculates the interest from the principal amount, annual rate, and number of overdue days. Use it when preparing demand letters or re-issuing invoices.

Formula

Late Payment Interest = Principal × Annual Rate × Days Overdue ÷ 365
Days Overdue: Counted from the day after the due date to the calculation date (the due date itself is excluded; the calculation date is included). Example: Due May 1, Calc. Date May 31 → 30 days
Fractions below ¥1 are rounded down

Common Annual Rates

3% (Civil Code, Art. 404): The statutory rate since April 2020. Applies when no rate is specified in the contract.
6% (Former Commercial Rate): The pre-reform statutory rate for commercial transactions. Used when old contracts still reference this rate.
14.6% (Subcontract Act): A mandatory rate under the Act against Delay in Payment of Subcontract Proceeds. Applies by law when a principal contractor delays payment to a subcontractor, overriding any contractual agreement.
14.6% (Consumer Contract Act, Art. 9-2): The maximum rate a business can charge consumers for late payment. The actual rate follows the contract terms; any portion exceeding this cap is void.
Custom: A rate individually agreed upon in the contract (permitted under Civil Code, Art. 419).

Note: While late payment interest has a legal basis, the contractual rate takes precedence. For specific collection or legal actions, please consult a lawyer or legal professional.

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