Late Payment Interest + Penalty

Late-payment interest (juros de mora) — how it works

Moratory interest compensates the creditor for the delay. Simple form: J = V · i · t; compound: M = V · (1 + i)^t. Example: R$ 1,000 overdue by 30 days at 1%/month simple = 1,000 · 0.01 · 1 = R$ 10 in interest, plus a 2% contractual penalty (R$ 20) → total R$ 1,030.

• Civil obligations — Civil Code art. 406 refers to "the rate the Treasury charges on overdue federal taxes". The STJ (REsp 1,795,982) settled on the Selic rate; if the contract sets a different rate, the cap is 1%/month (Decree 22,626/33, "Lei da Usura").
• Labour claims — after the STF's ADC 58 (Dec/2020): IPCA-E as correction plus statutory interest before the lawsuit, and Selic (which already includes correction) from the citation onward.
• Tax debts — National Tax Code art. 161 sets the federal Selic monthly; states and municipalities follow their own laws (often Selic too).
• Consumer relations — CDC art. 52 caps contractual penalty at 2% of the instalment and interest at 1%/month for consumer debts.

Brazilian context

A typical demand letter to a Brazilian consumer adds correction + 1%/month interest + 2% penalty. In court, monitory actions and tax executions overwhelmingly apply Selic from the due date. Selic also already contains inflation, so charging IPCA on top of Selic over the same period is double counting and routinely rejected by the courts.

FAQ

Simple or compound interest by default? In Brazilian civil law the default is simple interest; compound interest (anatocism) needs an express clause and minimum annual periodicity (Súmula 121 STF, later relaxed for the financial system).

What is the difference between juros remuneratórios and juros de mora? Remuneratory interest pays for the use of capital while the debt is current; moratory interest only kicks in after default.

Can I charge both penalty and interest? Yes — they have different purposes (penalty is fixed, interest is time-based). Consumer debts are capped at 2% penalty and 1%/month.