Interface modeling is one of the important components in the numerical modeling of soil–structure interaction problem. It is equally important as material and geometrical modeling. Inaccurate modeling of the interface between the soil and the structure may lead to unreliable results. However, in many cases, interface modeling is overlooked and the interface between the soil and the structure is generally modeled as a rigid connection. In the present paper, we have shown the influence of interface modeling in the analysis of laterally loaded deep foundations. A finite element model of laterally loaded foundation–soil system is developed wherein the foundation is modeled as a linear elastic system and the soil as nonlinear which is defined by the multi-yield surface plasticity model. The interface between the soil and the foundation is modeled using zero thickness contact element, which is defined, by constitutive relationships capable to define sliding and separation mechanisms at the interface. The results obtained from the proposed finite element model are then compared with the conventional approach of interface modeling. The present study indicates that the conventional approach overestimates the lateral load capacity of deep foundation as well as it is unable to explain the mechanisms of the deformation of laterally loaded foundation–soil system. © 2021, The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.