Late Payment Interest Calculator For Malaysian Businesses
Updated: Sep 27
As covered in our guide on late payment interest, while Malaysian courts generally uphold agreed interest clauses, excessively high rates may be challenged as punitive or unconscionable.
In commercial transactions, a rate of 18% per annum is considered a standard benchmark which works out to:
1.5% per month, or
approximately 0.0493% per day
Additionally, interest is charged only on the outstanding principal and not on accrued interest, which gives us the following formula:
Outstanding Amount × Annual Interest Rate × (Days Overdue ÷ 365)
Of course, you are welcome to use our calculator below which also generates a late payment reminder email you can send to your clients.
Late payment interest calculator
Note: This calculator is set to a default interest rate of 18% per annum, so if your terms specify a different once, replace our rate with yours so you generate an accurate reminder!
Missed deadlines and late payment interest accruing across many months are warning signs that recovering the outstanding amount may not be so straightforward. For those in this situation, a firm lawyer's letter of demand often does wonders to encourage prompt repayment.
Otherwise, that's it from us, and we wish you a smooth recovery 🙂
Let Rule & Co recover your unpaid invoices
Rule & Co. is a debt recovery law firm that helps creditors in Malaysia get paid for work they've already delivered. If you are facing trouble with outstanding payments, let us help you recover your unpaid invoices - we prioritise minimal upfront costs and fees proportionate to the value and complexity of the case.
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