The Finance Algorithm

Invoice Payment Calculator

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

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$5k

The net amount before GST

GST registration is mandatory if turnover exceeds $75,000

When the payment is due

%
0%

Discount offered for faster payment (e.g., 2% if paid within 7 days)

%
10%

Annual interest rate charged on overdue invoices

0

How many days past the due date

The button asks our AI to explain these figures in words.

Invoice totals & terms

Total due

$5,500

$500 GST included

Early-pay total

$5,500

$0 saved

Overdue total

$5,500

$0 late interest

Discount annualised

0.0%

effective annual cost

What the invoice total comprises

Subtotal + GST is the standard breakdown. Late interest is added separately when an invoice goes past its due date.

$5,500total
Subtotal90.9%
GST9.1%

Total owed as days overdue grow

Late payment interest compounds over time. Chase invoices weekly once overdue: small actions early prevent large write-offs later.

$5,54530d$5,59060d$5,63690d$5,771180d$6,050365d

Value of the early payment discount

A 2% discount on 30-day terms is annualised at ~31%: expensive in pure interest terms but often worth it for the cash flow boost.

$280.5%$551%$1102%$1653%$2755%
Tax invoice essentials. Over $1,000: your name & ABN, date, invoice number, buyer details, line items, GST amount, total. Late interest is only enforceable if it's in your terms of trade before the invoice is sent. Standard term in Australia is Net 30.

How it works

Put in an invoice amount and this works out the GST, what an early-payment discount would cost, and what a late payer would owe in interest or fees. It works from either side: if you send invoices, you'll see what a discount for paying early really costs you; if you pay them, what paying late adds.

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

Worked 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.

Questions people ask

What payment terms should I use?
Common choices are 7, 14 or 30 days for business clients, payment on receipt for consumers, and progress payments for large projects. Whatever the terms, state them on the quote and invoice. Under the Payment Times Reporting Scheme, large businesses report how quickly they pay small business suppliers.
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. The rate and any late fee are whatever the agreed terms say, and they need to be reasonable.
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.

The terms, in plain English

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.

Official sources

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