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How to calculate late payment interest on an invoice

Statutory late payment interest is simple interest: amount x yearly rate / 365 x days late, counted from the day after the due date. The rate is a reference rate plus a margin (10,4% at the EU minimum now, 11,75% in the UK).

The formula

interest = amount x rate / 100 / 365 x days late

This is the formula the Overdue Kit calculator uses: simple interest, 365 days a year, counted from the day after the due date.

Step by step

1. Find the first late day. Interest runs from the day after the due date. An invoice due on 1 September is late from 2 September.
2. Pick the reference rate. EU: the reference rate in force on the first day of the half-year in which the debt became late (1 January or 1 July). UK: the Bank of England base rate on 30 June or 31 December before the debt became late.
3. Add the margin. EU minimum: plus 8 points (10,4% now with the ECB rate). Germany: plus 9 points. UK: plus 8% (11,75% now).
4. Work out the daily interest. Invoice amount x yearly rate / 365. This is simple interest: no interest on interest.
5. Multiply by the days late. Daily interest x number of days late, rounded to the cent.
6. Add the fixed compensation. EUR 40 in the EU, GBP 40, 70 or 100 in the UK, per invoice.

Worked example

Note the rounding: the calculator rounds the total interest to the cent, not the daily amount. EUR 2.400,00 x 10,4% / 365 = EUR 0,6838 per day, which gives EUR 20,52 for 30 days.

Common mistakes

• Using today's central bank rate instead of the rate fixed for the half-year the debt became late.
• Starting on the due date. The first day of interest is the day after.
• Claiming statutory interest from a private consumer. These rules cover business debts only.
• Ignoring a contract rate. In the UK, a late payment rate in your contract replaces the statutory one.

Rates and sources as stored on 11 October 2026. Business-to-business debts only. Templates and calculations, not legal advice.