Late payment interest calculator — UK & EU
When a client pays a commercial invoice late, UK and EU law entitles you to statutory interest plus a fixed sum on top of the invoice — whether or not your contract mentions it. Most freelancers never claim it. Work out exactly what you are owed, with the legislation it comes from.
What the law actually entitles you to
When a business pays another business late, the late payer owes more than the invoice. In both the UK and the EU this is statutory — it applies automatically, by default, without needing to be written into your contract, and without the client agreeing to it.
Two separate things are owed:
- Statutory interest on the unpaid amount, running daily from the day after payment was due until the day it is paid.
- A fixed sum for the cost of chasing it — owed once per late invoice, on top of the interest.
United Kingdom
Under the Late Payment of Commercial Debts (Interest) Act 1998, statutory interest is the Bank of England base rate plus 8 percentage points. The fixed sum is banded by the size of the debt:
| Size of the debt | Fixed sum |
|---|---|
| Under £1,000 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 and over | £100 |
The bands are on the debt, not on the debt plus the interest — a £999.99 invoice stays in the £40 band even once interest carries the total past £1,000. If chasing the debt cost you more than the fixed sum, the reasonable excess is also claimable under s.5A.
European Union
Under Directive 2011/7/EU, statutory interest is the European Central Bank reference rate plus at least 8 percentage points, and the fixed sum is at least €40.
The words “at least” are doing real work. The Directive sets a floor that every member state must meet, not a single rate they all share. Several states legislate a higher margin or a larger fixed sum, and member states outside the euro — Poland, Sweden, the Czech Republic, Hungary, Romania — use their own central bank’s rate rather than the ECB’s. So an EU figure on this page is the minimum you are owed. Your own country may owe you more, and never less. That is why EU results here are labelled as a floor.
The half-year rule most calculators get wrong
The statutory rate is not whatever the central bank rate happens to be today. It is fixed for a whole half-year, and the half-year that counts is the one in which your invoice became late — the day after it was due.
| Reference rate | Read on | |
|---|---|---|
| UK | Bank of England base rate | 31 December / 30 June |
| EU | ECB main refinancing rate | 1 January / 1 July |
Two consequences catch people out. A central bank move inside a half-year changes nothing for debts already late in it — the Bank of England cut to 4.00% on 7 August 2025, and debts that went late in July 2025 are still charged off June’s 4.25%. And a debt does not get re-priced when it rolls into the next half-year: the rate it started at is the rate it keeps until it is paid.
This calculator only uses rates that have been read from the Bank of England and ECB published tables. Ask it about a period nobody has checked yet and it will tell you so rather than estimate. A figure you are going to put in front of a client is only worth having if it holds up when they query it.
Common questions
- Can I charge interest if my contract does not mention it?
- Yes. Statutory interest applies by default to commercial debts. You do not need a clause in your contract, and the client does not need to have agreed to it. The exception is where your contract already contains its own substantial remedy for late payment — an agreed interest rate that is a genuine deterrent — in which case that term applies instead.
- What if we never agreed a payment date?
- Where no date was agreed, the debt is generally treated as late 30 days after the later of the day you delivered the work or the day the client was notified of the amount owed. Use that date as the due date in the calculator.
- Does this apply to every client?
- It applies to business-to-business debts. Work for a private individual as a consumer is not covered, and public authorities are covered but often on shorter payment terms. Both parties acting in the course of a business is the test.
- Do I have to claim it?
- No. It is an entitlement, not an obligation, and plenty of freelancers decide the relationship is worth more than the interest. Knowing the number is still useful: it tells you what you are giving up, and it is a fact you can mention without threatening anything.
- Is the fixed sum instead of interest, or as well?
- As well. The fixed sum — £40, £70 or £100 in the UK depending on the size of the debt, €40 in the EU — is compensation for the cost of chasing the debt, and it is owed once per late invoice on top of the interest. In the UK, if chasing actually cost you more than the fixed sum, the reasonable extra is claimable too.
- Does the interest stop when they pay?
- Yes. Statutory interest runs from the day after the debt became late until the day it is paid. That is why this page shows the amount accruing per day as well as the total — an invoice left another month keeps growing.
This is an arithmetic tool with its sources shown, not legal advice. For a disputed or substantial debt, or anything turning on the wording of your contract, talk to someone qualified.