Late payment interest calculator

When one business pays another late, the Act lets the supplier charge statutory interest at 8% a year over Bank Rate. The Bank Rate used is the one in force on 30 June or 31 December, whichever came last before interest starts to run, and that rate holds for the life of the debt (Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002).

Bank Rate was 3.75% on 30 June 2026, so a debt whose interest starts between 1 July and 31 December 2026 carries 11.75%. Bank Rate rose to 4.00% on 5 November 2026; unless it moves again before 31 December, debts whose interest starts in the first half of 2027 will carry 12.00%.

Multiply the debt by the rate, divide by 365 for the daily amount, and multiply by the days late. Interest runs from the day after the due date. An invoice of £5,000 due on 31 August 2026 and paid on 9 November 2026 is 70 days late: £587.50 a year at 11.75%, £1.61 a day, £112.67 in interest. Add the £70 fixed sum and the claim is £5,182.67.

Interest is simple: it runs on the debt only, never on interest already added. Send a new invoice for the interest and the fixed sum once you decide to claim them.

If you agreed a payment date, the debt is late the day after it. Agreed terms should usually be within 30 days for public authorities and 60 days between businesses; a longer period is allowed between businesses only if it is fair to both. If no date was agreed, payment is late 30 days after the customer receives the invoice or after you deliver the goods or service, whichever is later.

Getting this date wrong is the usual error. A debt due on 31 August that you count from the invoice date of 1 August overstates the interest by 30 days, and an overstated claim invites a dispute.

On top of interest you can charge a fixed sum for the cost of recovering each late payment: £40 for a debt up to £999.99, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more. It is charged once per payment, so ten late invoices of £500 each carry £400. Where recovery costs more than the fixed sum, you can claim reasonable costs as well.

Time spent chasing is a cost too. Sixminute records that work as it is done, so the hours behind a recovery claim are there when you need them.

If your contract sets its own interest rate for late payment, you claim that rate instead of statutory interest. A contract with a public authority cannot use a lower rate. The calculator takes a contract rate: choose "Rate in the contract" and type it in.

For a judgment in a United States court, use the judgment interest calculator, which carries the rate for each state.