What is Amount Due?
Amount Due Definition
The amount due is the total sum of money owed and to be paid by a set date either to:
- The seller of a good or service
- A government authority, such as a tax agency
- A lender
Amount Due Meaning
As it relates to the seller of a good or service, the amount due is the total cost of the good or service, including taxes and other surcharges that may be applicable.
Generally, it is due immediately but it can be paid later in some instances.
It is generally inserted at the bottom of a bill.
As it relates to taxes, the amount due is the money owed on earnings by taxpayers to their government, if the total tax is greater than total tax payments previously made.
It is due by Tax Day and, if it is delayed, is eligible for penalties.
It is generally included as a calculation in tax forms.
As it relates to loans or other bills, the amount due is the sum of money necessary to pay a bill in full, including principal, interest, fees and other charges.
Amount due can also be used for the sum of charges related to partial or full payments for credit card loans.
In both cases, failure to make payments by a set date results in a late charge that is added to interest.
An individual’s credit score is also affected when they do not pay the amount due by a certain date.
Amount Due vs. Account Balance
While they are generally used interchangeably, amount due and current balance are different.
Balance is the difference between credits and debits in an account and can be the same as amount due in certain instances.
For example, the current balance and amount due remain the same during a one-time purchase of a good or service.
Amount Due on Credit Card
But it differs in other cases. For credit cards, current balance refers to the balance available to the holder during the current payment cycle.
On the other hand, amount due refers to the payment that the holder must make in order to continue using the credit card.