Failure of solder joints under shear frequently occurs along a path near and parallel to, but not necessarily exactly at, the interface between the alloy and the bonding material. A numerical finite element analysis was employed to simulate the deformation in solder during cyclic lap-shear testing. High magnitudes of equivalent plastic strain were seen to initiate from the corner regions and spread into the solder along a concentrated band close to the interface. Damage can be expected to occur along the localized band, thus rationalizing the experimentally observed failure path. The effect of solder geometry was also explored in this study.