Late Payment Interest Calculator — Overdue Invoices (UK Statutory, MSME, Custom)

Late payment interest calculator for overdue invoices

This late payment interest calculator works out what you can add to an invoice that was paid late — or is still unpaid. Choose the rules that apply: UK statutory interest for business-to-business debts (8% a year over the Bank of England reference rate, plus £40, £70 or £100 fixed compensation), India’s MSMED Act for micro and small suppliers (compound interest with monthly rests at three times the RBI Bank Rate), or a custom rate such as the 1.5% a month written on many US invoices, with a grace period and a flat late fee.

Enter the amount, the invoice (or acceptance) date, the payment terms and the date it was paid. The calculator finds the due date, the days late and the right rate, then shows interest, fees, a month-by-month schedule for compound interest and a ready-to-edit payment reminder. Everything runs in your browser.

How to use the Late Payment Interest Calculator

1. Choose UK statutory, India MSME or Custom rate.
2. Enter the unpaid amount, the invoice or acceptance date and the payment terms in days (leave blank for the legal default).
3. Enter the date it was paid, or press Use today to count to today.
4. Check the rate box for your rules — the reference rate, the RBI Bank Rate or your own contract rate.
5. Read the interest, compensation and schedule, then copy the summary or edit and copy the payment reminder.

Late Payment Interest Calculator features

UK: interest on late commercial payments

Under the Late Payment of Commercial Debts (Interest) Act 1998, a business can claim simple interest at 8% a year plus the reference rate — the Bank of England Bank Rate in force on 31 December (for debts that become overdue from January to June) or 30 June (July to December). The rate is fixed for the life of that debt. Bank Rate has been 3.75% since 18 December 2025 (held on 17 September 2026), so debts overdue in 2026 carry 11.75%.

Example: a £5,000 invoice dated 1 May 2026 on 30-day terms is due 31 May and paid on 30 September — 122 days late. Interest is £5,000 × 11.75% × 122 ÷ 365 = £196.37, plus £70 fixed compensation, so £266.37 on top of the invoice. Fixed compensation is £40 below £1,000, £70 below £10,000 and £100 from £10,000. Without an agreed date, payment is late 30 days after the invoice or delivery, whichever is later; agreed terms are normally up to 60 days between businesses and 30 days for public authorities.

India: MSME interest for delayed payment

Section 15 of the MSMED Act 2006 says a buyer must pay a micro or small supplier by the date agreed in writing — never more than 45 days from acceptance — or, without an agreement, before the appointed day: the day after 15 days from acceptance. If not, section 16 makes the buyer pay compound interest with monthly rests at three times the RBI Bank Rate, whatever the contract says. With the Bank Rate at 5.75% (RBI website, checked 24 October 2026), that is 17.25% a year.

Example: ₹1,00,000 of goods accepted on 1 April 2026 with no written credit period are due by 16 April. Paid on 15 October, that is five whole months and 29 days: ₹1,00,000 × (1 + 17.25% ÷ 12)⁵ × (1 + 17.25% × 29 ÷ 365) − ₹1,00,000 ≈ ₹8,869. Leftover days are charged pro rata at the same annual rate. Which Bank Rate applies over a long delay is not settled in the Act, so the rate box is editable.

Custom and US late fees

Many invoices in the US state a late charge such as 1.5% a month (18% a year) after a grace period, sometimes with a flat fee. Such terms bind only if the customer agreed to them, and state laws cap interest and fees, so check before charging. For a simple or compound comparison over longer periods, see the compound interest calculator; to include interest on your next bill, use the invoice generator.