# Late payment interest calculator

> Calculate late payment interest or a late fee on an overdue invoice. Enter the amount and due date to see the interest on the overdue payment and the new total.

Canonical: https://www.invoqk.com/late-fee-calculator

This is an estimate, not legal advice. Whether you can charge a fee or interest depends on your contract and national law.

## How to calculate late payment interest on an invoice

There are two common ways to charge for a late invoice. A late fee is a percentage you agreed in your terms, such as 1.5% per month. Statutory late payment interest is a rate set by law, usually a reference base rate plus a margin, charged as simple interest per day.

This late payment calculator handles both. Choose a monthly late fee or statutory interest, enter the invoice amount and due date, and it counts the days late, calculates the interest on the overdue payment and adds UK fixed compensation where it applies. The daily figure is the amount times the annual rate divided by 365, so you can also use it as a per diem interest calculator.

### Late payment interest formula

Interest = invoice amount × annual rate × days late ÷ 365. For statutory interest the annual rate is the base rate plus the margin, for example 5% + 8% = 13%. For a late fee, use amount × monthly rate × full months late instead.

I = P × (r / 365) × t

### Worked example

A 2,500 invoice is 30 days overdue at a 13% annual rate: 2,500 × 0.13 × 30 ÷ 365 = 26.71 in interest. With a 1.5% monthly late fee and two full 30-day periods late, the fee is 2,500 × 0.015 × 2 = 75.00.

2,500 × 0.015 × 2 = 75.00

### Late payment charges by country

UK: statutory interest of 8% over the base rate plus £40, £70 or £100 fixed compensation. EU: at least 8 points over the reference rate under the Late Payment Directive. Germany: 9 points over the base rate between businesses plus a €40 flat fee. US: no federal rate, so charges depend on your written terms and state law.

Cross-border commercial standards

### How to avoid late payments

State your payment terms and any late fee on the invoice, send it promptly, and keep the due date short. Send a friendly reminder before the due date, and follow up with a firm overdue notice if it still goes unpaid.

Recommended: Net-14 or Net-30 payment terms

## Common questions

### How do I calculate a late payment fee on an invoice?

Multiply the invoice amount by your late fee rate and by the number of periods the invoice is overdue. A common freelancer term is 1.5% per month. The fee only applies if it is stated in your contract or on the invoice.

### How do I calculate late payment interest?

Multiply the amount by the annual interest rate and by the days late, then divide by 365. For example, 1,000 at 10% for 30 days is 1,000 × 0.10 × 30 ÷ 365, about 8.22. Add any fixed compensation your national law allows.

### How much interest can I charge on overdue payments in the UK?

Under the Late Payment of Commercial Debts (Interest) Act, business-to-business invoices can carry statutory interest of 8 percentage points over the Bank of England base rate. The UK also adds fixed compensation of £40, £70 or £100 depending on the invoice size. Rules differ by country, so check yours.

### Can I charge interest on delayed payment in the EU?

The EU Late Payment Directive sets a default of 8 percentage points over the reference rate for business-to-business invoices, and each country applies it in its own way. Check the rate and the payment period in your country's law.

### Can I charge a late fee in the US, for example in California?

There is no federal statutory rate for private invoices, and states set their own limits. You can generally charge a late fee if you agreed to it in writing beforehand, and a fee that looks like an unreasonable penalty can be challenged. Check your state's rules before you rely on it.

### What is the difference between a late fee and late payment interest?

A late fee is a charge you set in your own terms, often a percentage per month. Late payment interest is a rate set by law that accrues daily on top of the invoice. Some contracts use one, some the other, and the statutory rules may limit what you can add.

### Does this calculator use compound interest?

No. It uses simple interest on a 365-day year, which matches how statutory late payment interest is usually stated.

## Related

- [Free invoice calculators](https://www.invoqk.com/calculators)
- [Invoqk home](https://www.invoqk.com)