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Late Payment Interest Calculator for Business Debts

Calculates statutory interest and compensation for late commercial payments in Ireland, based on the European Communities (Late Payment in Commercial Transactions) Regulations.

Your details

The total amount of the invoice, excluding VAT.

The date the payment was contractually due. If not specified, the law assumes 30 days from invoice receipt.

The date up to which you want to calculate interest. Typically today or the date of payment.

The payment period agreed in the contract. If not specified, the statutory period of 30 days applies.

The applicable ECB rate for the period. The statutory rate is this + 8%. The rate is fixed on 1 Jan and 1 Jul each year. Enter the correct rate for your period or use the default (latest known).

Result

Total Amount Now Due €894.37

The original invoice amount plus statutory interest and fixed compensation.

How it is calculated

Effective Due Date The date from which late payment interest starts to accrue, based on the agreed payment period and statutory rules.
31 January 2026
Days Late The total number of calendar days the payment is overdue. Interest is only calculated if this is greater than zero.
15 days
Statutory Interest Rate The annual interest rate applicable: ECB refinancing rate + 8 percentage points.
12.5 %
Late Payment Interest Interest accrued for the overdue period.
€4.37
Fixed Compensation A fixed sum payable to the creditor for recovery costs, based on the invoice amount.
€40.00
Keep in mind
  • This calculator applies to business-to-business transactions. Consumer debts are governed by different rules.
  • The ECB refinancing rate changes every 1 January and 1 July. The default value is an example. You must verify and input the correct rate applicable during the late payment period for an accurate calculation.
  • If the contractually agreed payment period is over 60 days and is deemed 'grossly unfair' to the creditor, the statutory 30-day period may apply. Legal advice may be needed in such cases.
  • Interest is calculated on a simple daily basis. The law does not specify compound interest.
  • The fixed compensation is payable only if the debtor is late with payment, regardless of the interest amount.

Indicative result, calculated from the details and the rules listed below. It does not replace an official calculation or advice from a professional.

Prepare the document now

With the result already worked out, you can fill in the document right away.

Notice of Breach of Contract

Statutory Late Payment Interest in Ireland

Under Irish law, specifically the European Communities (Late Payment in Commercial Transactions) Regulations 2012, businesses have a statutory right to charge interest and claim fixed compensation when commercial payments are late. This right cannot be contracted away unless the alternative terms are more favourable to the creditor.

The rules are designed to discourage late payment and compensate suppliers for the cost and inconvenience of chasing debts.

How is Late Payment Interest Calculated?

The calculation involves three key components:

  1. Effective Due Date: Interest starts accruing from the day after the payment was due. The due date is either the date agreed in the contract or, if no date is specified, 30 calendar days from the date you received the invoice. If the contract agrees to a period longer than 60 days, it may be challenged as grossly unfair, in which case the 30-day rule applies.
  2. Interest Rate: The statutory rate is the European Central Bank (ECB) refinancing rate in force on 1 January or 1 July of the relevant year, plus 8 percentage points. This is an annual rate.
  3. Fixed Compensation: In addition to interest, you are entitled to a fixed sum for recovery costs:
    • €40 for debts up to €1,000.
    • €70 for debts over €1,000 up to €10,000.
    • €100 for debts over €10,000.
    This compensation is payable once per late payment, regardless of how long the payment is overdue.

Worked Example

Imagine your business issued an invoice for €5,000 with a payment term of 30 days. The invoice was due on 1 March 2026. The customer finally pays on 1 May 2026. The ECB rate on 1 January 2026 is 4.5%.

  • Days Late: 61 days (from 2 March to 1 May).
  • Statutory Rate: 4.5% + 8% = 12.5% per annum.
  • Daily Rate: 12.5% / 365 = 0.03425%.
  • Interest: €5,000 * 0.0003425 * 61 = €104.46.
  • Fixed Compensation: The debt is between €1,000 and €10,000, so €70.
  • Total Owed: €5,000 + €104.46 + €70 = €5,174.46.

Common Scenarios

No Agreed Payment Date: The law presumes a 30-day payment period from the date the debtor receives the invoice.

Payment Before the Calculation Date: If you are calculating what was owed on the date the payment was actually made, use that payment date as the Calculation Date.

Disputes: The right to charge late payment interest exists independently of any dispute about the goods or services, unless the court finds the debt was not due.

Next Steps: Formal Notice

Before considering legal action, you should formally notify the debtor of the breach and the amounts due. A Notice of Breach of Contract serves this purpose, clearly outlining the original debt, the calculated interest and compensation, and a final deadline for payment. Using our template ensures you include all necessary legal details.

Frequently asked questions

Do these late payment rules apply to consumers?

No. These statutory interest and compensation rules apply specifically to business-to-business (B2B) transactions. Different rules govern late payments from consumers.

Where do I find the correct ECB refinancing rate?

The ECB publishes its main refinancing operation rate on its website. For late payment purposes, use the rate in force on either 1 January or 1 July of the year in which the late payment period falls. The rate is fixed for the following six months.

Can I charge compound interest?

The Irish regulations do not provide for compound interest. The statutory entitlement is to simple interest calculated on a daily basis.

Is the fixed compensation per invoice or per debtor?

The fixed compensation is payable per late payment. If a debtor is late in paying a single invoice, you are entitled to one compensation payment. If they are late on multiple invoices, compensation may be due for each one.

What if my contract has a different interest rate?

You can charge the higher of the contractual rate or the statutory rate. The statutory rights are a minimum standard. If your contract provides for a higher rate of interest or compensation, you may claim that instead.

When should I send a formal notice?

It is advisable to send a formal Notice of Breach of Contract soon after the payment becomes overdue. This clearly communicates the debt, the additional charges, and sets a final deadline for payment, which is often a prerequisite for further legal steps.

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