The invoice is late, and someone has told you to add interest. Can I charge interest on a late invoice is the legal question. The practical one is whether the number you are about to type is even current, and whether sending it will cost you the client.
I have watched people put a rate on a statement because it 'sounded about right.' The right to interest and the figure you claim are different problems. One can be solid while the other is stale.
Can I charge interest on a late invoice if the contract says nothing
In a lot of Europe, including the UK and Norway, the right to statutory interest on a business debt often exists whether or not you wrote it into the contract. The idea is that a company should not get free credit by ignoring your due date. The detail is local. This is the shape of the rule, not a ruling on your invoice.
In the UK, commercial debts can carry statutory interest and a fixed recovery sum even when the contract is quiet. A contract can replace that only with a real remedy, not a token. In Norway, overdue claims can carry statutory interest without a clause in your terms. Across the EU, business invoices sit under national versions of the same idea. A directive sets a floor. It is not one shared invoice.
That right is aimed at business debts. A person buying as a consumer is a different set of rules, and those rules are often tighter on what you can add after the fact. If you are invoicing from, or into, the United States, do not assume a European statute followed you. There, interest on a late invoice is usually something the contract has to allow. No clause often means no interest, whatever a blog in another country told you.
A fee you wrote yourself is separate. Use the term you wrote. Statutory interest is the law's number when the debt qualifies. If you are unsure which one you are claiming, do not send the email yet. How to charge a late fee you already agreed is the contract version. This article is the statutory one.
The rate changes, so calculate it
The statutory rate is published, and it is reset. In much of Europe, including Norway, the figure for a half year is set around January and July from a central bank rate plus a margin the law describes. The UK rate is tied to the Bank of England base rate in a similar way. I am not typing today's percentage. A frozen number becomes a false claim the next time the rate moves.
Use the UK and EU late payment calculator. It takes the amount, the due date, and how late the invoice is, and it applies the rate in force for that period. It also shows the fixed compensation sum where the rules add one. If your country publishes a different figure from the European floor, use that published figure. Do not average two blog posts and call it a calculation.
You need three dates before you open the calculator. The invoice date. The due date you actually set, including a real day if the term was only 'net 14'. And the date they paid, or today's date if they have not. Interest runs on the overdue days. If part was paid, it runs on what was still outstanding.
The fixed sum that comes with the interest
Interest is not the only amount these laws talk about. Many of them add a fixed compensation for the cost of recovering the debt, once per invoice, once statutory interest has started. In the UK the sum depends on the size of the debt. In the EU there is a minimum flat amount, and some countries set their own. Norway publishes a standard compensation figure for the half year along with the interest rate. The point of the sum is to cover the nuisance of chasing, not to punish.
I am leaving the figures out on purpose. They get updated, and a frozen post will be wrong later while still sounding official. Read the amount in the calculator for this debt and this period. If your real chasing costs are higher, some laws let you claim the difference when you can point at the cost. A round number born on a Friday is not that.
Do not also invent a reminder fee on the same email unless your terms already named one. A contractual reminder fee and the statutory compensation are easy to double count. If you did not write the reminder fee down before the work started, leave it out. Claim the statutory pieces you are entitled to, or waive them. Do not build a third category called 'admin' in the heat of the chase.
Charge it, waive it once, or leave it
The legal answer and the client answer split here. You can be allowed to charge interest and still decide that charging it is a bad trade. You can also decide that never charging it is how this client learned to pay you last.
Charge it when the relationship is commercial, the delay is real, and you are willing to explain the number. Put the original total, the interest, and any fixed sum on a short note. Say the period. Link or attach the original invoice. Ask them to pay the new total. A procurement team that treats any extra line as a dispute may hold the whole bill, so expect a question, and answer it with the dates rather than with a mood.
Waive it when you want the original invoice paid and you want them to see that late is not free. Calculate the interest, show it, and say you will waive it if the original total arrives by a day you name. Do that in writing. Do it once. A waiver you repeat on every invoice is a discount for paying late, and they will take it. A waiver you grant once, after a clean explanation, is a favour they can understand.
Leave it when the client is good, the slip is a few days, and they have already told you the date the transfer goes. Adding interest to a four day delay with a client you like can cost you the next project. That cost is real. So is the cost of leaving a forty day pattern untouched. The difference is the pattern, not your discomfort at asking.
Send the ordinary reminders first. Interest on day two feels like a trap. The sequence in how to ask for payment politely comes before this. If they have gone quiet, interest is one line on the next step, not a substitute for a clear demand.
What to do this week
Do not add a percentage from memory to the invoice that is annoying you tonight. Do these three things instead.
- Check whether this debt is a business invoice in a country with statutory interest, a contract that already names a fee, or neither.
- Run the amount and the dates through the calculator. Read the interest and the fixed sum it shows. Do not type over them.
- Choose one: charge it, waive it once in writing against a named pay date, or leave it because the slip is small and the client is not a pattern.
Write the sentence before you are angry. A calm note with a real number gets paid more often than a sharp note with a guessed one.
Frequently asked questions
Work out the amount for the days the invoice was late, tell the client in writing, and ask them to pay the original total plus that interest. Use the published rate for the period, not a figure you remember from last year. Say whether you are claiming it or waiving it. Do not hide a new number inside a resent PDF with no note.
Use the rate published for your country and for the dates the invoice was late, then let a calculator apply it. That rate is reset on a schedule, often twice a year, so a number typed from memory goes stale. There is often a separate fixed sum for the cost of chasing, on top of the interest. Do not guess either figure.
You need the unpaid amount, the due date, the date you were paid or today's date, and the statutory rate that covers those days. The UK and EU late payment calculator does that sum for you, including a fixed compensation amount where the rules add one. Simple interest on the overdue balance is the usual shape. Do not compound it in your head to make the number feel more serious.
In much of Europe, including the UK and Norway, a statutory right often exists on business debts even when the contract never mentions interest. It is not universal, and consumer debts are a different set of rules. In the United States you usually need the interest written into the agreement. This is general information, not legal advice for your invoice.
Not automatically. A good client who is a few days late, and who tells you why, may be worth a waiver. A client who is always late is being taught that waiting is free if you never charge. You can show the interest and waive it once, in writing, if they pay the original invoice by a date you name. Do that once, not as a permanent habit.
Statutory interest is interest a law allows on an overdue commercial debt, including in cases where your contract said nothing about it. The rate is published, and it changes, so you look it up for the half year you are in rather than memorising it. It is separate from a late fee you invented in your own terms. Both can exist. They are not the same line.
It is a set amount the rules add, once per overdue invoice, for the cost of chasing, on top of interest. In many places the amount depends on the size of the debt, or it is a flat figure that is updated on a schedule. The calculator shows the figure that matches the debt. Do not replace it with a round number you made up and call that number statutory.
If you named a due date and the debt qualifies, interest generally starts the day after that date. If you named no date, the law may supply one, and that supplied date is not 'whenever they get to it.' Check the rule for the country of the debt before you count the days. A wrong start date makes a correct rate produce the wrong money.
Keep reading
- Read how to ask for payment politely before you add anything to the total.
- Use these notes when a client will not pay and a reminder is no longer enough.
- See what software to chase overdue invoices can take off your Friday list.