B2B Late Payment Calculator — Interest & Penalty on Overdue Invoices
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An invoice overdue by 90 days on 5% gross margins does not cost you the invoice amount. It costs you the equivalent new revenue required to replace it — which is typically 3 to 5 times the face value of the debt. This calculator gives you the direct cost: the late payment interest and penalty you are legally entitled to charge under the EU Late Payment Directive (2011/7/EU) and equivalent legislation in your jurisdiction.
Enter your invoice amount, due date, payment date, and applicable interest rate. The calculator returns the daily interest accrued, the statutory fixed penalty fee (where applicable), and the total settlement amount you can legitimately claim.
How late payment interest works in B2B transactions
Under EU Directive 2011/7/EU, which applies to commercial transactions across EU member states, creditors are automatically entitled to claim interest on late payments without prior notice to the debtor. The statutory rate is the European Central Bank's reference rate plus 8 percentage points — currently placing the floor around 11–12% per annum depending on the ECB rate at the time of default.
In addition to interest, EU law entitles creditors to a fixed compensation fee per invoice: €40 for debts under €1,000, €70 for debts between €1,000 and €10,000, and €100 for debts above €10,000. These fees are owed automatically — you do not need to specify them in your original contract.
Outside the EU, equivalent frameworks exist: the UK Late Payment of Commercial Debts Act (8% above Bank of England base rate), US state-level usury laws (typically 12–18% APR), and similar legislation across major trading jurisdictions.
What rate should you use?
If your contract specifies a late payment rate, use that. If it does not, use the statutory rate for the debtor's jurisdiction. For cross-border B2B transactions within the EU, the 2011/7/EU rate applies unless both parties explicitly agreed to a different rate — and that agreement must be in writing and cannot be "grossly unfair to the creditor."
Can you actually collect it?
Calculating your entitlement and collecting it are different problems. Late payment interest is a legitimate claim and can be included in a demand letter or collection instruction. In practice, recovery of penalty fees and interest alongside the principal is more successful when the claim is formally documented and escalated through a specialist. Collecty includes penalty and interest recovery in standard collection instructions at no additional cost.