Late payment interest calculator

How the UK statutory figure is worked out

• Who it covers: business-to-business invoices where the contract does not set its own substantial remedy for late payment. It does not apply to consumers.
• Rate: 8% a year plus the Bank of England base rate (the “reference rate”). The reference rate is the base rate on 31 December (for debts that become overdue from 1 January to 30 June) or 30 June (for debts that become overdue from 1 July to 31 December). It stays fixed for that debt.
• Current figure: base rate on 30 June 2026 was 3.75%, so invoices falling overdue 1 July to 31 December 2026 carry 11.75% a year. Base rate on 31 December 2025 was also 3.75% (11.75% for 1 January to 30 June 2026).
• Daily interest = amount × rate ÷ 365, multiplied by the days late.
• Fixed compensation per invoice: £40 under £1,000; £70 for £1,000 to £9,999.99; £100 for £10,000 or more. Reasonable extra recovery costs can be claimed on top.

Sources: GOV.UK: charging interest on commercial debt, GOV.UK: claiming debt recovery costs, Late Payment of Commercial Debts (Interest) Act 1998, Bank of England Bank Rate.

US and Australia

US: there is no single federal late-fee rule for business invoices. You can generally charge the late fee or interest your contract or invoice terms set out, within your state's usury and late-fee limits, so put it in writing before the work starts. Australia: there is no general statutory late-payment interest for private B2B invoices; charge what your terms allow. Small businesses can get help from the Australian Small Business and Family Enterprise Ombudsman. For court steps see our AU small-claims guide.

General information, not legal advice. Check your contract and local rules.