Invoice Late Fee & Interest Calculator
Invoice late fee calculator: interest and fixed compensation on an overdue invoice under the UK Late Payment Act (8% + base rate), the EU Late Payment Directive, or your own contract rate.
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|---|---|
| Interest rate applied | — |
| Daily interest | — |
| Interest to date | — |
| Fixed compensation / late fee | — |
| Invoice amount | — |
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In short
UK businesses can charge statutory interest of 8% above the Bank of England base rate on overdue B2B invoices plus fixed compensation of £40, £70 or £100 depending on the debt size; the EU minimum is the ECB rate plus 8 points and €40. In the UAE, Saudi Arabia and Pakistan only the rate written in the contract applies. Interest = amount × annual rate ÷ 365 × days late.
Who this is for: Freelancers, agencies and finance teams chasing overdue B2B invoices in the UK, EU, UAE, Saudi Arabia or Pakistan.
What you can legally charge on a late invoice
- United Kingdom (B2B): the Late Payment of Commercial Debts (Interest) Act 1998 gives every business a statutory right to charge 8% above the Bank of England base rate on overdue commercial invoices, plus a fixed compensation of £40 (debt under £1,000), £70 (£1,000–£9,999.99) or £100 (£10,000+) per invoice. The base rate used is the one in force on 30 June or 31 December before the debt became late. Interest runs from the day after the due date (or 30 days after invoice/delivery if no terms were agreed).
- European Union (B2B): Directive 2011/7/EU sets a minimum statutory rate of the ECB main refinancing rate + 8 percentage points and a fixed recovery cost of at least €40. Member states may set higher rates (Germany uses base rate + 9 points).
- UAE, Saudi Arabia and Pakistan: there is no automatic statutory late-payment interest for commercial contracts. You can only charge what the contract says — many contracts specify a monthly percentage or a flat late fee — and in Saudi Arabia interest-style charges may be unenforceable, so a fixed administrative fee is the usual approach. Choose Contract rate and enter your terms.
Formula in every case: interest = amount × annual rate ÷ 365 × days overdue (simple interest, not compounded).
See also: UAE VAT Invoice Generator.
UK late payment interest on a £500 to £50,000 invoice (statutory rate 11.75%)
How much interest can I add to a £5,000 invoice that is 60 days late? The statutory rate for July–December 2026 is 8% + the Bank of England base rate of 3.75% = 11.75% a year, charged as simple daily interest from the day after the due date, plus fixed compensation of £40, £70 or £100 per invoice.
| Invoice | Per day | 30 days late | 60 days late | 90 days late | Fixed compensation |
|---|---|---|---|---|---|
| £500 | £0.16 | £4.83 | £9.66 | £14.49 | £40 |
| £1,000 | £0.32 | £9.66 | £19.32 | £28.97 | £70 |
| £2,500 | £0.80 | £24.14 | £48.29 | £72.43 | £70 |
| £5,000 | £1.61 | £48.29 | £96.58 | £144.86 | £70 |
| £10,000 | £3.22 | £96.58 | £193.15 | £289.73 | £100 |
| £25,000 | £8.05 | £241.44 | £482.88 | £724.32 | £100 |
| £50,000 | £16.10 | £482.88 | £965.75 | £1,448.63 | £100 |
Daily interest = invoice × 11.75% ÷ 365. The reference base rate resets on 30 June and 31 December; EU invoices use the ECB rate (2.40% from 1 July 2026) + 8% = 10.40% and a €40 minimum.
Assumptions
- Simple daily interest: amount × annual rate ÷ 365 × days overdue, counted from the day after the due date.
- UK: rate = base rate + 8%; compensation £40 (< £1,000), £70 (£1,000–£9,999.99), £100 (≥ £10,000).
- EU: rate = ECB rate + 8 points; €40 compensation. Contract mode uses your own rate and fee.
- Default reference rates are the last recorded values and must be confirmed.
Worked example
Rate = 3.75% + 8% = 11.75% a year → daily interest = 5,000 × 0.1175 ÷ 365 = £1.61
Interest for 45 days = £72.43; fixed compensation for a £1,000–£9,999.99 debt = £70
Total now due = 5,000 + 72.43 + 70 = £5,142.43
Frequently asked questions
Do I have to state late-payment interest on the original invoice?
In the UK and EU the statutory right exists whether or not the invoice mentions it, but stating your terms ('Interest will be charged under the Late Payment of Commercial Debts Act') removes any argument and improves payment behaviour.
Can I charge statutory interest to a consumer?
No — the UK Act and the EU Directive cover business-to-business (and business-to-public-authority) debts only. Consumer late fees must be in the contract and be reasonable.
Is the interest compound?
No, it is simple daily interest on the unpaid principal. This calculator does not compound.
Is late-payment interest subject to VAT?
In the UK, statutory interest and the fixed compensation are outside the scope of VAT — invoice them without VAT on a separate document from the goods or services.
How much interest can I charge on a late invoice in the UK?
8% above the Bank of England base rate per year, as simple daily interest, plus £40, £70 or £100 fixed compensation per invoice, for business customers.
Can I charge late fees in the UAE?
Only what the contract provides — there is no statutory late-payment interest for commercial contracts, so put a clear late-fee clause in every quotation and contract.
What is the late payment interest rate in the UK right now?
11.75% a year for invoices overdue between 1 July and 31 December 2026 — the statutory 8% plus the Bank of England base rate of 3.75% on the 30 June reference date. The rate resets on 31 December.
How do I calculate late payment interest on an invoice?
Invoice amount × annual rate ÷ 365 = daily interest, multiplied by the days from the day after the due date to the day you are paid. A £5,000 invoice 60 days late at 11.75% earns £96.58, plus £70 fixed compensation.
Can I charge a late fee on a consumer invoice?
Not statutory interest — the Late Payment Act covers business-to-business debts only. For consumers you can only charge what the contract says, and county courts award 8% simple interest if you sue.
Is there a time limit for claiming late payment interest?
Six years from the due date in England and Wales (five in Scotland); you can claim interest on invoices already paid late if you are still within that period.
What is the late payment interest rate in the EU and Germany?
The Directive minimum is the ECB main refinancing rate (2.40% from 1 July 2026) + 8 points = 10.40%, plus a €40 recovery fee; Germany applies the Bundesbank base rate + 9 points for B2B debts.
People also ask
How much late payment interest can I charge in the UK?
Statutory interest of 8% above the Bank of England base rate (3.75% as checked), plus fixed compensation of £40, £70 or £100 per invoice depending on the amount.
Can I charge late fees in the EU?
Yes — the Late Payment Directive allows the ECB rate (2.40%) plus 8 points and a minimum €40 recovery cost per invoice on B2B debts.
How is late interest calculated?
Amount × annual rate × days late ÷ 365, from the day after the due date (30 days from invoice if no terms were agreed).
Do I need a late-fee clause in my contract?
Statutory interest applies without one in the UK and EU for business customers; a contractual rate must be a substantial remedy or the statutory rate replaces it.
Can I charge late fees to consumers?
Only if the contract provides for it and the rate is reasonable; statutory B2B rates do not apply to consumers.
Is the late fee subject to VAT?
No — interest and compensation are outside the scope of VAT.
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