Late Payment Interest Calculator

As simple interest: the amount outstanding, multiplied by the annual rate, multiplied by the number of days late, divided by 365. Interest runs from the day after the payment due date up to the date of payment.

Under the Late Payment of Commercial Debts (Interest) Act 1998, a business may be able to claim statutory interest when another business pays a qualifying commercial debt late, unless the contract sets its own rate. GOV.UK sets out when it applies.

Eight percentage points over the Bank of England Bank Rate in force on 30 June (for interest that starts to run between 1 July and 31 December) or on 31 December (for interest that starts between 1 January and 30 June). The rate is fixed when interest starts and does not change with later Bank Rate moves.

Eight percentage points above the European Central Bank reference rate, set on 1 January and 1 July for the following six months. The Department of Enterprise says to use the rate in operation on the date the payment became overdue.

Where statutory interest applies, both the UK and Irish rules provide a fixed sum for recovery costs as well: £40, £70 or £100 in the UK and €40, €70 or €100 in Ireland, depending on the size of the debt. In the UK it can be charged once for each payment.

On the day after the payment due date. If an invoice was due on 1 September and paid on 2 September, it was one day late. If there is no agreed due date, the statutory payment date depends on things like when the invoice was received and when goods or services were supplied, so check the official guidance.

A contractual late payment rate can affect whether the statutory rate applies. Use the contractual rate option to calculate with the rate in your contract. The calculator does not decide which rate applies to your contract.

Yes. Choose that it has been paid and enter the date of payment. The calculator works out the days between the due date and the payment date.

Not in this version. With part payments, interest has to be worked out on the balance outstanding over each period, so calculate each period separately or take advice.

It does not determine state, provincial or other jurisdiction-specific statutory rights. If your contract specifies an annual late payment rate, use the contractual rate option in USD or CAD.

No. It is an estimate based on what you enter and the rules built into the tool. Whether interest or compensation can be charged depends on your contract and circumstances.