Late payment interest calculator
Work out the interest and fixed compensation you can add to a late business invoice. Pick the rules that apply, enter the amount and the dates, and copy the line for your reminder. General information, not legal advice.
Which rules
Late Payment of Commercial Debts (Interest) Act 1998. Business to business invoices only.
The invoice
Enter the amount and a due date before the payment date to see the interest.
The rates it uses
The reference rates are filled in with the figures in force on 5 October 2026. Check them before you send a claim, because they change.
| Rules | Yearly rate | Fixed sum per invoice |
|---|---|---|
| UK statutory interest | 8% + Bank of England base rate (3.75% since December 2025) | 40, 70 or 100 pounds by size of debt |
| EU minimum (Directive 2011/7/EU) | 8 points + ECB main refinancing rate on 1 January or 1 July (2.40% on 1 July 2026) | at least 40 euros |
| Germany (BGB section 288) | 9 points + Basiszinssatz (1.52% from 1 July 2026) | 40 euros |
| Your contract | whatever your terms say, within any legal cap | whatever your terms say |
Official sources: GOV.UK on late commercial payments, Bank of England Bank Rate, key ECB interest rates and the Bundesbank Basiszinssatz. Other EU countries write the directive into their own law, sometimes with a higher margin, so check yours.
Before you add it to a reminder
- Put the interest terms on the quote, the contract and the invoice. A charge that first appears in a reminder is the hardest kind to collect.
- In the UK, statutory interest does not apply if your contract sets its own substantial remedy for late payment.
- Think about the client. Adding interest to a good client's first late invoice can cost more than it brings in. Most people mention it first and claim it when an invoice is well overdue.
- Send it with the reminder, not on its own. The payment reminder email has a field for the late fee.
The longer explanation of payment terms and late fees by country is in the guide on invoice payment terms, and the full chasing sequence is in how to follow up on an unpaid invoice.
Questions
How is statutory interest on a late invoice calculated in the UK?
Under the Late Payment of Commercial Debts (Interest) Act 1998 it is 8% a year above the Bank of England base rate, as simple interest. Work out the yearly interest on the amount owed, divide by 365 for the daily figure, and multiply by the number of days late. GOV.UK shows the same method.
Which base rate do I use?
The Act uses a reference rate fixed twice a year: the base rate on 31 December for debts that become overdue from January to June, and on 30 June for debts that become overdue from July to December. The rate stays the same for the life of that debt, even if the base rate changes later.
What fixed compensation can I claim in the UK?
On top of the interest, a fixed sum per invoice: 40 pounds for debts under 1,000 pounds, 70 pounds from 1,000 to 9,999.99, and 100 pounds for 10,000 or more. In the EU the Late Payment Directive sets a minimum of 40 euros per invoice.
Can I charge late payment interest to a consumer?
The UK Act and the EU directive cover business to business payments only. For private clients, rely on what your contract says and on consumer law where you are.
What about the United States?
There is no federal statutory rate for late business invoices. Interest is whatever your contract says, within the limits of state law, so pick the contract rate option and enter the rate from your terms.
Know which invoices are late
OIO lists every overdue invoice in one place and drafts the reminder with the invoice number, amount and due date filled in. You send it from your own mail and mark the invoice paid when the money arrives. Free plan, no card.
Start freeOther free tools: invoice generator, payment reminder email, day rate calculator.