Late Payment Interest Calculator
See how much interest an overdue invoice has run up. Enter the amount, how many days late it is and the interest rate to get the daily interest and the total now due.
Estimate only. Interest is calculated on a simple daily basis (amount × rate ÷ 365 × days). Your right to charge interest, the applicable rate, and any caps depend on your contract and local law — confirm before applying a charge. The figures you enter aren't sent to a server.
How Late Payment Interest Works
When an invoice goes unpaid past its due date, you may be entitled to charge interest on the outstanding amount. The usual method is simple daily interest: take the annual interest rate, divide it across 365 days, and apply it for each day the invoice is late.
For example, a £1,000 invoice at an 8% annual rate accrues about £0.22 per day, so after 30 days you'd add roughly £6.58 in interest. The figure is modest on small sums, but it grows quickly on large invoices and long delays — and the fixed compensation can matter more than the interest on smaller debts.
UK Statutory Late Payment Rights
In the UK, the Late Payment of Commercial Debts (Interest) Act 1998 gives businesses a statutory right to charge interest on overdue business-to-business invoices — commonly cited as 8% plus the Bank of England base rate — plus a fixed sum in compensation that rises with the size of the debt (£40, £70 or £100). This applies even if your contract doesn't mention interest, though a contractual rate can take its place.
Rules differ for consumer debts and by country, the base rate changes over time, and caps can apply. This calculator gives an estimate, not legal advice — confirm your right to charge and the current rate on GOV.UK or with a solicitor before applying it.
Chasing an overdue invoice? Our guides on what to do when a client won't pay and charging late fees on overdue invoices walk through reminders, demands and your options. Ready to re-send with a late-fee line? Use the free invoice generator.
Frequently Asked Questions
How is late payment interest calculated?
This tool uses simple daily interest: the unpaid amount multiplied by the annual rate, divided by 365, multiplied by the number of days overdue. So £1,000 at 8% for 30 days is roughly £6.58 in interest. Contracts can specify different methods, so check yours.
What interest rate can I charge on a late invoice in the UK?
For business-to-business debts, the Late Payment of Commercial Debts (Interest) Act 1998 gives a statutory right to charge interest commonly cited as 8% plus the Bank of England base rate, plus fixed-sum compensation (£40, £70 or £100 depending on the debt size). Your contract can set a different rate, and the current base rate changes — confirm the figures on GOV.UK before charging.
Can I always charge a late fee?
Not automatically. Your right to charge interest and the maximum rate depend on your contract and local law, and consumer rules differ from business-to-business ones. The safest approach is to state a clear late-payment clause in your terms and on your invoice from the start.
What is the UK fixed-sum compensation?
On top of interest, UK businesses can usually claim a fixed sum per overdue commercial invoice: £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. Select the relevant tier in the calculator to include it.
Should I actually charge the late fee?
Many businesses keep a late-fee clause as leverage and waive it once payment arrives. It signals you're organised and serious, which often gets the invoice paid faster. Whether to enforce it is a commercial and relationship decision.