Interest on unpaid invoices and court judgments

The interest printed on an invoice is not automatically recoverable in every dispute. Review the original agreement, whether the interest term was accepted, and any legislation affecting the charge. Distinguish contractual interest from prejudgment interest and interest accruing after a judgment.

Prepare a calculation that shows the principal, relevant dates, rate, payments, and method used. Ontario publishes court interest rates that vary by period, so using today's rate for every stage can produce an incorrect demand. Check whether the judgment itself addresses interest. Do not add arbitrary administrative charges to increase the balance. A transparent account makes it easier for the other party, your representative, and the court to identify what remains genuinely disputed.

An interest worksheet should make the calculation reproducible. Identify the starting balance, the event from which interest is sought, the rate and legal basis, and the treatment of each later payment. Separate different periods where the applicable basis changes. A monthly percentage printed for the first time on a final invoice may raise questions about agreement and enforceability. Avoid treating an accounting system's automatic interest figure as a legal conclusion without reviewing the underlying contract and relevant requirements.

For settlement purposes, state clearly whether the proposed amount includes interest and costs or leaves either item open. A payment described only as principal can create later disagreement if the parties expected different allocation. After judgment, use the order and applicable rules rather than simply continuing the pre-litigation invoice practice. Keep a dated calculation with the supporting rate information so a later payment can be reconciled accurately. When the numbers are transparent, the parties can focus on any genuine dispute about entitlement instead of trying to reconstruct an unexplained total.

Sources

• Ontario prejudgment and postjudgment interest rates
• Rules of the Small Claims Court O Reg 258 98

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General Ontario legal information, not legal advice for your matter, and reading it does not create a retainer. Sources checked 15 October 2026: check the current law, forms and dates before you act.

Photos from Pexels: Paying with a contactless card at a terminal · Papers marked paid and due beside a calculator.

This article is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.