Calculate interest owed
If entered, days late is counted from the day after this date to today.
Leave the statutory rate alone unless your contract sets a different one.
- Invoice amount
- -
- Days late
- -
- Rate applied
- -
- Interest owed
- -
- Fixed compensation
- -
- Total due
- -
Simple interest, calculated as amount x rate / 100 x days / 365. Estimates only, not legal advice.
Collection letter generator
Fill in the details, use the values from the calculator above, then copy the letter into your own letterhead.
How statutory late payment interest works
United Kingdom: the Late Payment of Commercial Debts (Interest) Act 1998 gives suppliers an automatic right to charge statutory interest on qualifying business-to-business debts. The rate is the Bank of England base rate plus 8 percentage points per year, fixed for each half-year using the base rate in force on 31 December (for January to June debts) or 30 June (for July to December debts). Interest is simple, not compound, and runs from the day after payment was due. Suppliers can also claim a fixed sum per invoice: 40 pounds under 1,000 pounds, 70 pounds from 1,000 to 9,999.99 pounds, 100 pounds at 10,000 pounds or more.
European Union: Directive 2011/7/EU gives creditors statutory interest at the ECB reference rate plus at least 8 percentage points, with a fixed minimum compensation of 40 euros for recovery costs. The reference rate is the one in force on 1 January or 1 July for the half-year in which the debt fell due.
United States: there is no single federal late payment statute for invoices. Whether you can charge interest, and at what rate, depends on your contract and on state law. Several states set a default rate that applies when a contract calls for interest but names no rate, or when a court awards prejudgment interest. The calculator lists states whose rates are traceable to a specific statute, with the statute named. Where a state sets no fixed default rate, the tool marks it "rate varies".
Frequently asked questions
How is late payment interest calculated?
Most statutory schemes use simple interest on a 365-day year: interest = invoice amount x annual rate / 100 x days late / 365. Interest is not compounded. The UK and EU also allow a fixed compensation sum per invoice on top of the interest.
Can I charge interest if my contract never mentioned it?
In the UK and EU, yes: statutory interest is an automatic right on qualifying business-to-business debts unless your contract provides a different, substantial remedy. In the US, it depends on the state. Some states apply a default statutory rate only where the contract calls for interest without naming a rate; others apply it only when a court awards prejudgment interest. Check the statute cited for your state before invoicing.
What is the current UK statutory rate?
11.75% per year for debts that became late between 1 July and 31 December 2026 (Bank of England base rate of 3.75% in force on 30 June 2026, plus 8 percentage points). The rate is re-fixed each half-year, so verify the current Bank of England base rate before relying on it.
What is the current EU statutory rate?
10.40% per year for debts that became late between 1 July and 31 December 2026 (ECB main refinancing operations rate of 2.40% in force on 1 July 2026, plus 8 percentage points), plus a minimum 40 euro fixed compensation. The reference rate resets each half-year.
Can I use these rates on an invoice to a consumer?
No. The UK Act and the EU Directive apply to commercial (business-to-business and business-to-public-authority) transactions only. US consumer debts are governed by separate state and federal consumer rules, which often cap or prohibit late charges. This tool is for commercial debts.
Do I charge tax on late payment interest?
In the UK, statutory late payment interest and the fixed compensation sums are outside the scope of VAT. In the EU and the US, treatment varies by member state or jurisdiction, so check local tax rules. This calculator adds no tax to the interest figure.
Disclosure
Affiliate disclosure: We may earn a commission if you use invoicing software linked here. Any such links are clearly marked, and they never affect the rates or calculations shown on this page.
Rates verified 2026-10-01. Statutory rates change over time, and US state rules vary by claim type. This tool provides estimates for information only and is not legal advice. Confirm the current statute before invoicing.
Guides
- How to Charge Interest on an Overdue Invoice Without Losing the Client
The contract clause that makes it enforceable, a 4-step reminder sequence, and a worked $4,500 example. - UK Statutory Late Payment Interest: 11.75% and the Fixed Sum Most Suppliers Never Claim
The automatic right UK suppliers already have, the £40-£100 compensation per invoice, and how to claim it.