Most invoice templates say “1.5% per month.” Most of them are one sentence away from meaning it.
Short answer
Yes, if your contract or invoice terms say so. But there's a federal trap: state a rate like “1.5% per month” without also stating what that works out to per year, and the Interest Act caps what you can actually collect at 5% per annum, no matter what you meant to charge. In Alberta, interest on an overdue proper invoice is mandatory by statute, at a rate the regulation prescribes.
Interest Act s.4 says “no interest exceeding the rate or percentage of five per cent per annum shall be chargeable, payable or recoverable” wherever a contract states a rate for a period shorter than a year — daily, weekly, monthly — without also stating the yearly rate it's equivalent to. Section 3 covers the other gap: “whenever any interest is payable by the agreement of parties or by law, and no rate is fixed by the agreement or by law, the rate of interest shall be five per cent per annum.” Between the two, a rate that's silent or incomplete defaults to 5% a year, full stop.
Invoice terms reading “1.5% per month on overdue balances” feel like an 18% annual rate (1.5 × 12). But because the invoice never states “18% per annum” in those words, a court will only enforce 5% a year. On a $40,000 overdue balance for six months, that's the difference between $3,600 (18%: $40,000 × 0.18 × 0.5) and $1,000 (5%: $40,000 × 0.05 × 0.5) — a $2,600 gap created by one missing sentence on the invoice template.
Under Alberta's Prompt Payment and Construction Lien Act, s.32.6, “interest begins to accrue in accordance with the prescribed rates on any amounts included in a proper invoice that are unpaid and due.” The rate is set by regulation, so it isn't fixed by contract at all — but the trigger is automatic on a proper invoice, separate from whatever your own contract says, and doesn't depend on remembering the annual-equivalent wording that trips up the federal default.
Writing a monthly rate on an invoice template and assuming it converts to the obvious annual number — it legally doesn't, unless the invoice says so. It's the same drafting discipline that matters for a client who eventually becomes a bad debt: the paper trail has to say what you actually meant.
The second mistake is treating “the Act gives me interest” as a Canada-wide rule. Outside Alberta's regulated trigger, interest comes from your contract, and your contract has to survive the Interest Act's own drafting trap to be worth what you think it's worth — see how fixing an invoice format actually closed that gap and how a payment-term dispute plays out when the contract language is loose.
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