Small Claims Court

How much interest can you claim on a debt or a judgment in Ontario?

Last updated October 7, 2026.

In Ontario you can usually claim two kinds of interest: prejudgment interest, from the day the claim arose until judgment, and postjudgment interest, from judgment until you are paid. If no contract or statute sets the rate, the Courts of Justice Act rates apply. For 2026 the province lists 2.5% for prejudgment interest and 4.0% for postjudgment interest in every quarter.

Interest is not automatic on the way in: if you do not ask for prejudgment interest in your Plaintiff's Claim, it will not be in the judgment. Once you have a judgment, though, postjudgment interest runs on its own. Our page on help with Small Claims Court cases explains how Carson Frankum, a licensed paralegal in Hamilton, can help you claim and calculate it correctly.

How does interest work, step by step?

The rules are in sections 127 to 130 of the Courts of Justice Act, and the Ministry of the Attorney General publishes the quarterly rates and worked calculations on its prejudgment and postjudgment interest rates page.

1. Check for an agreed rate first. If a written contract sets the interest rate, that is the rate you claim, and the Courts of Justice Act rate does not apply (ss. 128(4)(g) and 129(5)). The same is true where a statute sets the rate. The province's page says you must state that rate in your claim.
2. Claim it in your Plaintiff's Claim. State the amount owed, the interest you claim and its basis. Interest is not counted toward the $50,000 Small Claims limit, which is "exclusive of interest and costs" (Courts of Justice Act s. 23(1)). For more on the limit, see how much you can sue for.
3. Find the prejudgment rate for the quarter your case started. With no agreed rate, the province's table gives the rate by the quarter in which the court issued your first document, which in Small Claims Court is the Plaintiff's Claim. Behind the table, section 127 sets that rate from the Bank of Canada bank rate in the quarter before, rounded to the nearest tenth of a percent.
4. Count the days. Prejudgment interest runs from the date the cause of action arose to the date of the order (s. 128(1)). The province's method: amount awarded, times the rate, divided by 365, times the number of days.
5. Get judgment. A clerk can sign default judgment for a fixed debt "including interest if claimed" (rule 11.02 of the Rules of the Small Claims Court). Otherwise a judge decides the amount at trial or an assessment.
6. Postjudgment interest starts automatically. From the date of the order, money owing under it, including costs and prejudgment interest, bears interest at the postjudgment rate (s. 129(1)). The province's table gives that rate by the quarter in which the order was made, and it stays fixed for that judgment.
7. Recalculate as payments come in. Interest applies only to what is still unpaid, so each partial payment starts a new period. The total keeps growing until the debt is paid in full.

The province's page lists rates back to 1985 for postjudgment interest and to the end of 1989 for prejudgment interest. A quarter is the three months ending March 31, June 30, September 30 or December 31 (s. 127(1)). Always check the current table before you file, since a new quarter's rates are published after the first day of the last month of each quarter (s. 127(2)).

Interest is also separate from the money you spend on the case. Filing fees, service and the trial fee are disbursements, recovered through a costs award rather than as interest; our page on Small Claims Court fees lists them. Once costs are awarded, though, they become part of the judgment and earn postjudgment interest like the rest of it.

What changes the answer?

• A contract rate. If you and the other side agreed on a rate in writing, that rate replaces the statutory one for both prejudgment and postjudgment interest (ss. 128(4)(g) and 129(5)). Whether a rate printed only on an invoice, after the work was done, counts as an agreed rate depends on the facts, and a judge decides it.
• A monthly rate with no yearly equivalent. Under section 4 of the federal Interest Act, if a written contract (other than a mortgage on real property) sets interest per day, week, month or any period under a year, no more than 5% a year can be recovered unless the contract also states the equivalent yearly rate. "2% per month" on its own may therefore get you only 5% a year.
• Very high rates. Section 347 of the Criminal Code makes it an offence to agree to receive interest at a "criminal rate," defined as an annual percentage rate over 35% on the credit advanced.
• The judge's discretion. Under section 130, the court may disallow interest, allow a higher or lower rate, or change the period, where it considers that just. It looks at factors including changes in market rates, the circumstances of the case, any advance payment, the amount claimed versus the amount recovered, and conduct that shortened or lengthened the case.
• What prejudgment interest is not charged on. Section 128(4) excludes punitive damages, interest on interest, costs, future losses identified by the court, the period after an advance payment toward settlement, and consent orders unless the debtor agrees.
• Instalment orders. Where a judgment is payable by instalments, each missed payment bears interest only from the date it was missed (s. 129(2)). See paying a judgment in instalments.
• Personal injury. Interest on non-pecuniary damages for personal injury follows the rate in the court rules instead (s. 128(2)).

A worked example: the landscaper's unpaid invoice

For example, imagine a Hamilton landscaper named Theo who finished a backyard job for $6,000 with no interest term in the contract. The invoice went unpaid, and for this example assume the cause of action arose on April 1, 2025. Theo filed his claim, asking for prejudgment interest under the Courts of Justice Act, in October 2025. (For the full process, see suing for an unpaid invoice.)

October 2025 falls in the fourth quarter of 2025, so the prejudgment rate from the province's table is 3.0%. Judgment came on May 12, 2026, which is 406 days after April 1, 2025. Using the province's method: $6,000 x 3.0% / 365 x 406 days = $200.22 in prejudgment interest.

The judge also awarded $600 in costs and disbursements. May 2026 is in the second quarter of 2026, so the postjudgment rate is 4.0%. Interest now runs on $6,800.22, the judgment plus costs plus prejudgment interest, at about $0.75 a day. If the client paid in full 90 days after judgment, the postjudgment interest would be $6,800.22 x 4.0% / 365 x 90 = $67.07.

Now change one fact: suppose Theo's signed contract said "2% per month on overdue amounts" and nothing more. Because it did not state the yearly equivalent, the Interest Act would limit recovery under that clause to 5% a year, and a judge would decide how it applies.

Common mistakes with interest

• Not claiming prejudgment interest. The province's page is clear: if the claim does not ask for it, the judgment will not include it.
• Using the wrong quarter. Prejudgment interest uses the quarter the claim was issued; postjudgment interest uses the quarter the order was made. Mixing them up changes the result.
• Starting prejudgment interest on the filing date. It runs from the date the cause of action arose (s. 128(1)), which is often months earlier.
• Charging interest on paid amounts. After a partial payment, interest runs only on the unpaid balance. Calculate each period separately.
• Relying on an invoice rate as if it were agreed. A rate added to an invoice is not automatically a contract rate, and a monthly rate without a yearly equivalent runs into the Interest Act.
• Forgetting interest when you enforce. Your judgment grows every day it is unpaid. Include the updated interest when you ask for an enforcement step such as an examination hearing.

What to do this week

1. Find any written contract, quote or terms and conditions, and check whether a rate was agreed and stated as a yearly rate.
2. Pin down the date the debt was due or the loss happened; that is likely where prejudgment interest starts.
3. Make sure your Plaintiff's Claim asks for prejudgment and postjudgment interest, under the contract or under the Courts of Justice Act.
4. Open the province's rates page and note the rate for the quarter you file in.
5. If you already have a judgment, write down the date of the order and the postjudgment rate for that quarter, and keep a running log of payments received.
6. Before any enforcement step, recalculate the balance with interest to the current date.

Frequently asked questions

Does interest count toward the $50,000 limit?

No. The Small Claims Court's limit applies to the amount claimed "exclusive of interest and costs" (Courts of Justice Act s. 23(1)), so interest can take a judgment above $50,000.

Do I have to claim postjudgment interest?

Postjudgment interest arises under section 129 on money owing under an order, and the province's page says it starts accumulating automatically from the date of the order. It is still sensible to ask for it, and for any contract rate, in your claim.

What should my claim say about interest?

State the amount owed, then say whether you claim interest at a contract rate (give the rate) or under the Courts of Justice Act, and from what date. If your claim is based on a document such as a contract or invoice, rule 7.01(2) of the Rules of the Small Claims Court requires a copy to be attached, or the claim must say why it is not.

Does the postjudgment rate change each quarter?

No. The province's page says the postjudgment rate is set by the quarter the order was made and stays the same for that judgment, including when you calculate interest on partial payments.

Is interest charged on the costs award?

Postjudgment interest runs on everything owing under the order, including costs (s. 129(1)). Prejudgment interest is not charged on costs (s. 128(4)(c)). See getting your costs back if you win.

How long can interest keep running?

Until the judgment is paid. Small Claims enforcement documents such as writs of seizure and sale expire and need renewing, so see how long a Small Claims judgment lasts to keep your remedies alive.

Can I charge interest if my invoice said nothing about it?

Yes, at the Courts of Justice Act rates, as long as you claim prejudgment interest in your Plaintiff's Claim. The judge keeps the discretion under section 130 to adjust it.

Where can I check the rate myself?

On the Ministry of the Attorney General's prejudgment and postjudgment interest rates page, which O. Reg. 339/07 requires the Deputy Attorney General's designate to publish. Our existing article on collecting on a Small Claims judgment covers what to do with the number once you have it.

Sources

• Courts of Justice Act, sections 23 and 127 to 130 (Ontario e-Laws)
• Prejudgment and postjudgment interest rates (Ministry of the Attorney General)
• Publication of Postjudgment and Prejudgment Interest Rates, O. Reg. 339/07 (Ontario e-Laws)
• Rules of the Small Claims Court, O. Reg. 258/98, rules 7.01 and 11.02 (Ontario e-Laws)
• Interest Act, section 4 (Justice Laws Website)
• Criminal Code, section 347: criminal interest rate (Justice Laws Website)
• Small Claims Court Jurisdiction and Appeal Limit, O. Reg. 626/00 (Ontario e-Laws)

Need help with a Small Claims Court matter? Contact us today for a consultation.

This page gives general information about Ontario law, not legal advice for your situation. Cheddar Paralegal PC is a paralegal firm licensed by the Law Society of Ontario; licensed paralegals can help only with matters the Law Society allows paralegals to handle.