Note: this tool is intended to provide a general, informational estimate only. Interest rates and rules can change, and your actual entitlement depends on your specific facts — treat any estimate as a planning aid, not a final number a court will necessarily award.
What you'll need to use it
When the calculator is live, expect it to ask for:
- The principal amount you're claiming (the core debt or loss, before interest).
- The date interest should start running from — see what date does interest start running below.
- The date you expect judgment (or simply today's date, for a running estimate).
- Whether your contract specifies its own interest rate, since that can override the general default.
What is prejudgment interest?
Prejudgment interest is interest that can accrue on the amount you're owed for the period between when the loss happened (or the debt became due) and the date a court actually decides your case. The idea is straightforward: money you should have had months or years ago is worth more than the same number would be if paid on time, so interest compensates for that gap.
It's calculated separately from the principal amount you're claiming, and separately from postjudgment interest, which is a different kind of interest that can apply after a decision is made if the judgment still isn't paid.
Does interest count toward the $50,000 limit?
Good news for larger, older debts
Small Claims Court's monetary limit of $50,000 applies to your principal claim, exclusive of costs and interest. That means if your core claim is $48,000, you can generally still claim prejudgment interest on top of that without it pushing your case over the limit.
This matters most for claims that have been outstanding a long time — the longer the money has been owed, the more interest can add up, and knowing it sits outside the cap can change how you think about a claim that's close to the monetary limit.
How it's generally calculated
Prejudgment interest in Ontario civil cases is generally governed by the Courts of Justice Act, which sets out rules for how it applies when a contract doesn't already specify its own interest term. The applicable rate is set under that framework and is periodically updated — it isn't a fixed number that stays the same indefinitely, so don't rely on a rate you saw somewhere without confirming it's current.
Confirm the current rate
Because the applicable rate changes periodically, this guide doesn't quote a specific percentage. Confirm the current rate before relying on any calculation for an actual filing — the calculator, once live, will use current figures.
At a mechanical level, prejudgment interest is generally calculated as simple interest — principal × rate × time — rather than compounding, but confirm this against your specific situation, since contract terms can change how it's applied.
What date does interest start running?
This is often less obvious than it sounds, and it depends on the type of claim:
- A single, clear debt (like an unpaid invoice with a due date) — interest often runs from the date the debt became due, which is usually the easiest scenario to document and calculate.
- A loss that happened on a specific date (like property damage) — interest often runs from the date of the loss itself, since that's when you were deprived of the money needed to address it.
- A series of amounts owed over time (like multiple missed payments) — this can be more complex, sometimes calculated separately for each amount or from an average or midpoint date, since each missed payment technically starts its own clock.
- An amount that's still being finalized (like the final cost of repairs that took months to complete) — the start date may be tied to when the amount became reasonably ascertainable, rather than an arbitrary earlier point.
Because the start date directly affects how much interest accrues, it's worth identifying clearly and being able to justify with documentation (invoices, contracts, or correspondence showing when the amount became due).
Common mistakes to avoid
- Forgetting to claim it at all — since it generally isn't added automatically, leaving it out of your claim usually means leaving it on the table.
- Using an outdated or guessed rate instead of confirming the current applicable rate.
- Picking an arbitrary start date without being able to explain or document why that date is correct.
- Ignoring a contractual interest clause that may set a different rate than the general default.
- Compounding interest without a basis to do so, when simple interest is the general approach absent a specific reason otherwise.
When a contract sets its own rate
If your contract already specifies an interest rate for late payment, that rate generally applies instead of the general default rate. This is common in commercial invoices and loan agreements, which often state something like a specific percentage per month or year on overdue amounts. Check your agreement carefully — a contractual rate can result in a meaningfully different amount than the general default, in either direction.
If you're the one drafting invoices or contracts going forward, this is also worth thinking about proactively: a clearly stated late-payment interest term, agreed to upfront by both sides, tends to be more straightforward to enforce later than relying on the general default framework after the fact.
A worked example (illustrative)
To show how the calculation works mechanically, here's a hypothetical example using a made-up, illustrative rate — not the actual current rate, which you should confirm separately.
Illustrative only
Say you're owed a $6,000 invoice that became due exactly one year before your court date, and — purely for illustration — assume a hypothetical annual rate of 3%. Simple interest would be calculated as $6,000 × 0.03 × 1 year = $180. This shows the mechanic only; your actual rate and amount will differ.
How this differs from postjudgment interest
Prejudgment interest covers the period before a decision is made. Postjudgment interest is a separate concept that can apply after judgment, if the amount awarded still isn't paid — essentially continuing to compensate you for a delay, but starting from the judgment date rather than the original loss date, and potentially at a different rate. See our postjudgment interest calculator for that side of it.
How to actually claim it
Prejudgment interest generally isn't awarded automatically just because you were owed money — you typically need to specifically claim it when you file, stating the amount (or the basis for calculating it) alongside your principal claim. See preparing a Plaintiff's Claim for how to include this correctly, and keep documentation supporting your claimed start date on hand.
Official sources
- Courts of Justice Act, R.S.O. 1990, c. C.43 — sets the Small Claims Court’s jurisdiction and the statutory framework for pre- and post-judgment interest.
- ontario.ca: Suing Someone in Small Claims Court — the official overview, including the current monetary limit.
Frequently asked questions
Is prejudgment interest automatic?
Generally, you need to specifically request it as part of your claim rather than assuming the court will calculate and add it on its own.
Does prejudgment interest compound?
It's generally treated as simple interest rather than compounding, though a specific contract term could change how interest is calculated for your situation — check your agreement if one exists.
What if my contract doesn't mention interest at all?
If there's no contractual interest term, the general default framework under the Courts of Justice Act typically applies instead.
Can the defendant dispute the interest I'm claiming?
Yes — the start date, the rate, and the calculation method can all be challenged, so it helps to be able to explain and document how you arrived at your number.
Does interest keep accruing while the case is ongoing?
Generally, yes — prejudgment interest is meant to cover the entire period up to judgment, however long the case takes, which is one more reason delays can work against the party who owes money.
Can I claim interest on a claim involving property damage, not just debt?
Yes — prejudgment interest generally isn't limited to unpaid debts. It can apply to other types of monetary loss too, calculated from the date the loss occurred or became quantifiable.
Will the calculator tell me the exact rate to use?
Once live, it's intended to use current figures for the general default rate. It still can't account for a contract that sets its own rate, so check your agreement first.