Late Payment Interest Calculator
Work out the interest and the fixed sum the law adds to a late payment, with the working shown so you can check every figure.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
Enter one late payment to see the statutory interest at 8% above base rate and the fixed compensation, with the working.
Work out the interest
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 subcontract 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 subcontract before you claim.
How the figure is worked out
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 your main contractor 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. That daily figure is often what gets a payer moving.
Most subcontractors never work out interest because it feels like more trouble than it is worth. This makes it a 5-minute job. The right to it already exists, whether or not you choose to press it.
Sources
If you are still owed the money
Our late payment FAQ sets out what to do when a payment is late. To have your late payments checked and the sum and interest claimed for you, see our Late Payment Claim service.