Late payment interest calculator
Estimate statutory interest and fixed compensation on an eligible late payment. Check the applicable interest terms before relying on the result.
by Jack Butler-Kettle · About 3 min readShare
How to use it
Enter one late payment to see the statutory interest at 8% above base rate and the fixed compensation, with the working.
The working
Enter the sum, the date it was due and the base rate. The working appears here.
The rate is the base rate on that date plus 8%, and it stays the same for as long as the debt is unpaid. It is simple interest, worked out day by day.
The fixed sum is £40, £70 or £100, by the size of the debt. You can also claim reasonable costs of recovering the debt, where the fixed sum does not cover them.
If your contract sets its own remedy for late payment, and that remedy is substantial, it applies instead of statutory interest.
This is for guidance only. It follows the Late Payment of Commercial Debts (Interest) Act 1998, but it is not legal advice. Check the dates and the rate against your own contract before you claim.
Understanding your results
The total separates interest from fixed compensation. Check the principal, rate and late-payment period against your records before using it. A calculated figure does not establish that statutory interest applies or that the underlying debt is owed. Keep the working with the relevant invoice and payment record.
How it works
Enter the sum outstanding, the date it was due and the date it was paid, if it ever was. For a payment under a construction contract, the date it was due is the final date for payment. It is the last day the other party can pay without being late.
The calculator counts the days late. It then applies the Bank of England base rate you enter, plus the 8% that article 4 of the Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002 adds on top.
Section 5A of the Late Payment of Commercial Debts (Interest) Act 1998 adds fixed compensation for each debt on top of the interest. Where the payment is still unpaid, the working also shows what each extra day adds. The result is an estimate, not a decision that the debt or interest is legally due.
Check whether statutory interest applies to the debt, including any contractual interest remedy. Preserve your invoice, payment terms and payment record with the calculation.
For an unpaid balance, Overdue payment recovery considers those records alongside the debt itself. Interest is one part of the account, not a substitute for establishing what is owed.