Late Payment Interest Calculator

About the Late Payment Interest Calculator

When a business customer pays late, the law of many countries lets you add interest and a fixed sum for the cost of chasing it — without having agreed it in advance. Choose the rules, add the overdue invoices with their dates, and the calculator works out each invoice’s due date, the days late, the rate that applies and the interest and compensation, with the working day by day or month by month. It then writes a polite reminder, a firm reminder or a final demand that sets out the claim.

The rules built in: India’s MSMED Act (compound interest at three times the RBI Bank Rate for micro and small suppliers), the UK’s Late Payment of Commercial Debts Act (8% over the Bank of England base rate, plus £40, £70 or £100), the EU Late Payment Directive’s minimum (the reference rate plus 8 points and €40), Germany (9 points over the base rate and €40) and France (10 points over the ECB rate and €40) — or the rate in your own contract, simple or compounded. Reference rates come from the central banks’ published histories.

The free preview shows the rules, the due dates, the days late and the rates for your own invoices, with every amount hidden, and the letters as marked pages with the first part of their wording; the figures, the statement (CSV) and the letter as PDF, Word or text come with a Premium pass. Nothing you enter leaves your browser.

The rules, side by side

• India — MSMED Act, 2006 (India Code): for a supplier that is a micro or small enterprise. The buyer must pay on the date agreed in writing, never more than 45 days after accepting the goods or services, or with no agreement within 15 days. If not, it owes compound interest with monthly rests at three times the RBI Bank Rate from the day after, whatever the contract says (sections 15 and 16; MSME Samadhaan and its FAQ on monthly compounding). There is no fixed sum.
• United Kingdom — Late Payment of Commercial Debts (Interest) Act 1998 (GOV.UK): simple statutory interest at 8% over the Bank of England base rate, using the base rate on 31 December for debts that become late from January to June and on 30 June for those that become late from July to December (user guide), plus a fixed sum of £40 for a debt under £1,000, £70 up to £9,999.99 and £100 from £10,000, and reasonable recovery costs above it. With no agreed date, the debt is due on the last of the 30 days that begin with the day the customer gets the invoice or the goods or service, whichever is later, and interest runs from the next day. A contract that sets its own interest rate replaces statutory interest.
• European Union — Directive 2011/7/EU (EUR-Lex): simple interest at the reference rate plus at least 8 percentage points — in the euro area the ECB’s main refinancing rate in force on 1 January for the first half of the year and on 1 July for the second — and at least €40 for each late debt, plus reasonable recovery costs. Each country writes the directive into its own law, and some set more.
• Germany — § 288 BGB (text): 9 percentage points over the base rate (Bundesbank) between businesses, and a €40 lump sum.
• France — Commercial Code (Service-Public.fr): the ECB refinancing rate plus 10 points, using the rate on 1 January and 1 July, and a €40 indemnity for each invoice paid late. With nothing agreed, payment is due on the thirtieth day after the goods were received or the service was carried out. Terms of sale may set another rate, but not below three times the legal interest rate.

How the interest is worked out

• Days: interest runs from the day after the due date up to and including the day of payment (or the “interest up to” day for an invoice still unpaid), so a payment one day late carries one day of interest.
• Simple interest (UK, EU, Germany, France, a simple contract rate): amount × yearly rate × days ÷ 365 (or 360 where your contract says so). Where the reference rate changes on 1 January or 1 July, each half-year is worked out at its own rate; in the UK the rate stays the one the debt started with.
• Monthly rests (India; a contract rate compounded monthly): each month counted from the first day of interest earns the balance × the yearly rate ÷ 12, and at the month’s end its interest joins the balance, so the next month earns interest on it too. A part month earns its share day by day, and a change of the Bank Rate applies from its day. This is the method the site’s MSME Delayed Payment Interest Calculator uses, which also handles part payments against several invoices.
• Fixed sums are counted once for each invoice paid late or still overdue.

Rates the calculator uses

The reference rates come from the central banks’ own published histories: the RBI Bank Rate, the Bank of England Bank Rate, the ECB main refinancing rate and the Bundesbank base rate. The working lists the rate used for every stretch of days. If a rate has changed since this page was built, or your claim needs a rate from before the built-in history starts, choose one rate for the whole period and enter it.

From reminder to demand

Most late payers pay after a clear reminder, so the letters go step by step. The polite reminder sends the invoice details and asks for payment within a week, mentioning that late payments carry interest. The firm reminder sets out the interest and the fixed sums under the rules and asks for the total. The final demand gives a last date and says what you will do next: in India, refer the claim to the Micro and Small Enterprises Facilitation Council through MSME Samadhaan; in the UK, recover the debt through the courts.

The letters are generic templates and not legal advice: check the figures and the wording, keep copies, and have a lawyer review a demand before you send it if the amount matters. In the UK, a claim against a sole trader or an individual must follow the Pre-Action Protocol for Debt Claims — the UK Letter Before Claim Generator writes that letter.

Limitations

• Each invoice is either still unpaid or paid in full on one day. For part payments, split the invoice into the part paid and the part still owed, or use the MSME Delayed Payment Interest Calculator for India.
• Of the EU countries, Germany and France are built in; for any other, the directive’s minimum (reference rate + 8 points) is used unless you raise the margin to what that country sets, and outside the euro area you enter the national central bank’s rate. The EU rules work in euros: enter amounts in euros (the €40 is set in euros too).
• The rules apply between businesses (and, in the EU and the UK, to public bodies): not to sales to consumers.
• The letters do not cover court or Facilitation Council procedures, limitation periods or interest after a judgment.
• The PDF letter draws Latin, Cyrillic, Greek and Vietnamese letters; text in other scripts (Hindi or Chinese, for example) shows as “?” in it, and the page says so — the Word file and the copied letter keep it.
• This is an estimate for planning a claim, not legal advice — have a lawyer review a demand before you rely on it.

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