What payment terms should I use?

For most B2B services: Net 30 is standard. For smaller or recurring services: Net 14 or Net 7. For retail/consumers: due on receipt. For large projects: consider progress payments (30% upfront, 40% mid-project, 30% on completion). Always specify terms clearly on the invoice.

Can I charge late payment interest?

Yes, but it must be agreed in advance — typically in your contract, terms of trade, or on the invoice itself. You cannot retroactively charge interest without prior agreement. Common rates are 8-12% p.a. on the overdue amount. Some businesses also charge a flat late payment fee ($25-$100).

What should be on a valid tax invoice?

For invoices over $1,000: your business name and ABN, date, invoice number, buyer's identity, description of goods/services, quantity and price, GST amount, total amount. For invoices $82.50-$1,000: a simplified format is acceptable. Under $82.50: no tax invoice required for the buyer to claim GST credits.

Invoice Payment Calculator

Calculator

Calculate invoice totals with GST, early payment discounts, and late payment interest. Manage payment terms and outstanding invoices.

Free to useNo data storedAI insightsUpdated: February 2026

Getting paid is the lifeblood of any business, and managing invoices correctly is crucial. This calculator handles the maths: adding GST, applying early payment discounts (a proven strategy to accelerate cash flow), and calculating late payment charges on overdue invoices. Whether you're issuing invoices or receiving them, knowing the exact amounts and the true cost of payment delays helps you make better financial decisions.

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Real-World Examples

Standard Invoice with GST

A graphic designer invoices $3,500 for a branding project (GST-registered, 30-day terms).

Subtotal: $3,500. GST (10%): $350. Total due: $3,850. If a 2% early payment discount is offered for 7-day payment: discount = $77, early payment total = $3,773.

Overdue Invoice with Interest

A tradesperson's $8,800 invoice (inc. GST) is 45 days overdue. Late interest rate: 10% p.a.

Late payment interest: $8,800 × 10% × (45/365) = $108.49. Total now owed: $8,908.49. At 10% p.a., every month of delay adds ~$73. After 6 months overdue: $8,800 + $440 = $9,240.

Frequently Asked Questions

Glossary

Payment Terms

The agreed timeframe for invoice payment. 'Net 30' means payment is due 30 days from the invoice date. 'EOM' means end of month.

Early Payment Discount

A discount offered to incentivise faster payment. Expressed as '2/7 Net 30' — meaning 2% discount if paid within 7 days, otherwise full amount due in 30 days.

Tax Invoice

A document that meets ATO requirements for GST purposes. Required for the buyer to claim input tax credits. Must include ABN, GST amount, and other prescribed details.

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How to Use

1Enter the invoice amount (GST-exclusive).
2Choose whether to add GST.
3Select your payment terms.
4Optionally add an early payment discount to incentivise faster payment.
5If an invoice is overdue, enter the late payment interest rate and days overdue.
6See the total due, discount savings, and late payment charges.

Key Information

The standard payment term in Australia is 30 days, but some large companies use 60-90 day terms.
Offering a 2% discount for 7-day payment is common — it costs you 2% but can improve cash flow dramatically.
Late payment interest should be in your terms and conditions BEFORE it's needed — you can't retroactively add it.
The ASBFEO (Small Business Ombudsman) advocates for 30-day payment terms from large businesses to SMEs.

Pro Tips

A 2% discount for 7-day terms (2/7 Net 30) is equivalent to offering ~31% annualised — sounds expensive but the cash flow benefit is often worth it.
Use accounting software (Xero, MYOB, QuickBooks) to automate invoice reminders — manual chasing is time-consuming.
For large clients on 60+ day terms, consider invoice financing: get 80-90% of the invoice value within 24 hours.
Always include your ABN, GST amount (if registered), and payment details clearly on invoices.

Avoid These Mistakes

Not having clear payment terms on invoices — 'payment on receipt' with no follow-up leads to late payments.
Not charging late payment interest when agreed in the contract — it's a legitimate business practice.
Writing off small overdue invoices instead of chasing them — small amounts add up quickly.
Not reconciling invoices with payments — you might miss partial or incorrect payments.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026