Business IRS Interest Calculator
Last updated · Reviewed for accuracy against IRS.gov guidance
The IRS charges interest on unpaid business taxes — payroll, income and excise — at the federal short-term rate plus 3%, reset each quarter and compounded daily. The current rate is 7%. Enter the balance and its due date to see interest using each quarter's published rate.
Want a business tax specialist to review these numbers? Start with the free assessment.
Get a free reviewWhere the rate comes from
The IRS announces quarterly interest rates about a month before each quarter. Payroll tax interest generally starts on the Form 941 due date for the quarter, not on each missed deposit date.
Keeping interest down
Paying the oldest trust fund balances first, using a business payment plan and getting penalties abated all reduce interest. The free business tax relief assessment shows which options may fit.
See which relief programs you may qualify for
Answer 8 quick questions. Free, takes under 60 seconds, and won't affect your credit.
Start the calculatorFrequently asked questions
Is IRS interest on business taxes the same rate as for individuals?
+
For most business underpayments, yes — the federal short-term rate plus 3 points, 7% a year now, compounded daily. Large corporate underpayments over $100,000 pay 2 points more, which this tool doesn't model.
Does interest run on payroll tax debt?
+
Yes. Interest runs on unpaid Form 941 and 940 tax from the return's due date, and on most penalties, until paid.
Can interest be removed?
+
Interest generally isn't waived for reasonable cause. It drops automatically when a penalty is abated, and can be abated in limited cases of IRS error or delay.
Does a payment plan stop interest?
+
No. Interest continues until the balance is paid, so shorter plans cost less.
Is state sales tax interest the same?
+
No. Each state sets its own interest rate on sales tax. See the state sales tax pages for the agency's published rate.
Related
TaxSettlementCalculator.com is not a tax firm, law firm, CPA, or government agency and is not affiliated with the IRS or any state tax agency. Estimates are for educational purposes only and are not tax, legal, or financial advice. Results vary based on individual circumstances, and no outcome is guaranteed. We connect users with independent tax relief professionals.