Invoice Late Fee Calculator 2026: Calculate Statutory Interest & Penalties
Late payments are the silent killer of small businesses. If a client hasn't paid on time, you are legally entitled to compensation. Our Invoice Late Fee Calculator helps you determine exactly how much interest you can charge under the latest 2026 statutory rates and includes automatic calculation for Debt Recovery Fees. Whether you're in the EU, UK, US, or Poland, this tool uses the correct statutory rates for your region.
How to Calculate Interest on Late Payments
Calculating a late fee is more than just picking a percentage. Most commercial contracts allow for Statutory Interest, which is usually pegged to a central bank's base rate plus a fixed margin (typically 8%).
The Formula:
- Divide your Annual Interest Rate by 365 to find the Daily Rate.
- Multiply the Invoice Amount by the daily rate.
- Multiply that by the number of Days Overdue.
Daily Interest = (Invoice Amount × Annual Rate) ÷ 365
Total Interest = Daily Interest × Days Overdue
Example: For a $5,000 invoice that is 30 days late with an 11% annual rate:
($5,000 × 0.11 ÷ 365) × 30 = $45.21 in interest.
Statutory Interest Rates for 2026
If your contract doesn't specify a late fee, you can use the statutory rate for your region. Here are the rates effective as of January 1, 2026:
| Region | Statutory Rate Formula | Total Rate (Jan 2026) |
|---|---|---|
| European Union (EU) | ECB Rate + 8% | 10.15% |
| United Kingdom (UK) | BoE Base Rate + 8% | 11.75% |
| United States | Varies by State | ~10% - 18% |
| Poland (B2B) | NBP Rate + 8% | 13.75% |
Note: These rates are updated annually. Always verify current rates with your local authorities or legal counsel.
Don't Forget the Fixed Debt Recovery Fee
Did you know that in the UK and EU, you are entitled to a fixed sum for every late invoice? This is meant to cover the administrative costs of chasing the payment. Our calculator automatically applies these tiers:
- Tier 1: Under €1,000 / £1,000 / $1,000 → €40 / £40 / $40 fee
- Tier 2: €1,000.01 to €10,000 / £1,000.01 to £10,000 / $1,000.01 to $10,000 → €70 / £70 / $70 fee
- Tier 3: Over €10,000 / £10,000 / $10,000 → €100 / £100 / $100 fee
Adding this to your revised invoice often prompts faster payment from "serial late-payers." The recovery fee is separate from interest and is meant to compensate you for the time and administrative costs of pursuing the debt.
Simple Interest vs. Compound Interest
For commercial B2B invoices, simple interest is the standard. This means interest is calculated only on the principal (invoice amount), not on previously accrued interest.
Why Simple Interest?
- It's the legal standard in most jurisdictions for commercial debt
- It's easier to calculate and understand
- It's fairer to debtors, as interest doesn't compound daily
- Most contracts specify simple interest unless otherwise stated
Compound Interest: Charging compound interest (interest on interest) is generally not permitted for B2B late payments unless explicitly agreed upon in a signed contract. Even then, it's rare and may be subject to legal challenges.
How We Calculate: The Math Behind Late Fees
Our calculator uses standard simple interest formulas to determine late payment charges:
1. Days Overdue Calculation
We calculate the exact number of days between the due date and the calculation date:
Only positive values are used (if payment is early, no interest is charged).
2. Daily Interest Rate
We convert the annual interest rate to a daily rate:
We use 365 days per year as the modern global standard for commercial debt calculations.
3. Total Interest Calculation
Simple interest is calculated as:
This is equivalent to: (Invoice Amount × Annual Rate ÷ 365) × Days Overdue
4. Debt Recovery Fee
Fixed recovery fees are added based on invoice amount tiers:
- Under $1,000: $40 fee
- $1,000.01 - $10,000: $70 fee
- Over $10,000: $100 fee