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Late Payment Interest in Ohio (2026)

7% per year (2026) — Ohio Rev. Code §1343.03 / §5703.47: federal short-term rate (rounded) + 3%, set annually by the Tax Commissioner. 7% for calendar year 2026. 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

$5,057.53

Growing $0.96 every day it stays unpaid

principal
$5,000
interest
$57.53

Rate verified 2026-07-06 · Source: Ohio Department of Taxation — Interest rates · Methodology

Calculate your invoice

Rate prefilled from the Ohio default (7% per year (2026)) — override it if your contract sets its own.

$

60 days overdue

%

Ohio default: 7% per year (2026)

Total now owed to you · Ohio

$5,057.53

$5,000 principal · 60 days overdue at 7%

interest accrued
$57.53
growing daily by
$0.96

Simple interest: amount × (7% ÷ 365) × 60 days. Information, not legal advice — contract terms can override statutory defaults.

The rule in plain English

Ohio ties its statutory interest to the federal short-term rate: each October the Tax Commissioner rounds it and adds 3 percentage points, fixing the rate for the following calendar year. For 2026 the rate is 7%.

That rate applies to money due on contracts and accounts — including unpaid invoices — where no written contract sets a different rate, and to judgments entered during the year.

The Ohio Supreme Court has confirmed the statutory rate applies to open accounts (running invoice balances) unless a signed written contract states another rate.

A judgment locks its rate for life: 2026 judgments carry 7% until paid, regardless of later changes.

Legal basis: Ohio Rev. Code §§1343.03, 5703.47.

Worked example

invoice = $5,000, 60 days overdue, rate = 7.00%

daily interest = $5,000 × (7.00% ÷ 365) = $0.96

interest = $0.96 × 60 days = $57.53

total owed = $5,057.53

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 (7% per year (2026)), days overdue, daily amount — so there is nothing to dispute.
  • The legal or contractual basis for the interest (Ohio Rev. Code §§1343.03, 5703.47; 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 Ohio?
Ohio Rev. Code §1343.03 / §5703.47: federal short-term rate (rounded) + 3%, set annually by the Tax Commissioner. 7% for calendar year 2026. On a $5,000 invoice 60 days overdue, that is about $57.53 in interest. (Ohio Rev. Code §§1343.03, 5703.47; verified 2026-07-06.)
Do I need a clause in my contract to charge this?
Effectively yes. Ohio 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 (7% per year (2026)) 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.
Does the Ohio rate change?
Resets each 1 January (announced mid-October). 7% applies for calendar 2026.
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 (Ohio Rev. Code §§1343.03, 5703.47). 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 Ohio, verified 2026-07-06 against Ohio Department of Taxation — Interest rates. 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

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