Late Payment Interest Calculator
In the UK and EU, charging interest on late commercial invoices is not rude — it’s the law working as intended. Work out exactly what an overdue invoice is accruing, then quote the number in your payment reminder.
Simple daily interest, statutory method. B2B transactions only.
Your rights, jurisdiction by jurisdiction
United Kingdom
The Late Payment of Commercial Debts (Interest) Act 1998 gives every business — including sole traders — the right to charge 8% plus the Bank of England base rate on overdue B2B invoices, plus fixed compensation of £40, £70 or £100 depending on the debt size, plus reasonable recovery costs beyond that. You don’t need a contract clause; the right exists by default unless your contract provides a “substantial remedy” of its own. See GOV.UK: Late commercial payments.
European Union
The Late Payment Directive (2011/7/EU) guarantees at least 8 percentage points over the ECB reference rate plus a €40 minimum recovery fee per invoice for B2B debts. Member states transpose it with local variations — some set higher compensation — and public authorities must generally pay within 30 days.
United States
No federal statutory interest applies to ordinary B2B invoices — your entitlement comes from your contract, so include a late-fee clause (commonly 1–1.5% per month) and check your state’s usury caps and prompt-payment statutes. Use the “Custom rate” mode above with your contract’s figure.
Worked example
A £4,500 invoice, 45 days overdue, with the BoE base rate at 4%: interest runs at 12% annually — £1.48/day — totalling about £67, plus £70 fixed compensation. A polite email quoting “£137 and counting” concentrates minds wonderfully.
Rules verified against official sources August 2026; base rates change — always check the current rate.
Frequently asked questions
Can I really charge interest on a late invoice?
In the UK and across the EU, yes — it is a statutory right for business-to-business transactions, no contract clause required. The UK’s Late Payment of Commercial Debts Act gives you 8% + the Bank of England base rate plus fixed compensation per invoice; the EU Late Payment Directive gives at least 8 points over the ECB reference rate plus €40 minimum. In the US there is no federal statutory rate — your right to interest comes from your contract, so put a clause in it (state late-payment and prompt-pay laws may also apply).
Will charging interest damage the client relationship?
Many freelancers use the statutory right as leverage rather than revenue: a polite reminder that quotes the exact interest accruing (this calculator gives you the number) is remarkably effective at moving your invoice to the top of the pile. You can always waive the interest once paid — but you can’t claim leverage you never mention.
When does interest start running?
From the day after the due date on your invoice (or, with no agreed terms, 30 days after the invoice/delivery under both UK and EU rules). It runs until the day the debt is paid. This calculator uses simple interest on a daily basis, which is the standard statutory method.
What is the fixed compensation on top of interest?
The UK adds £40 for debts under £1,000, £70 up to £10,000, and £100 above that — per invoice. The EU directive sets a minimum of €40 per invoice (several member states allow more, and reasonable recovery costs can be claimed on top in both regimes).
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General information, not legal advice. Statutory rules apply to business-to-business debts and vary in detail by jurisdiction and contract terms. For significant sums, consult a solicitor or use a formal debt-recovery service.Full disclaimer.