Statutory late-payment interest under EU Directive 2011/7, UK LPCDA 1998, or common US contractual rules. See exactly what your client owes.
Built by the PayShield team - freelancers tired of chasing late invoices · Last reviewed April 2026
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Directive 2011/7/EU on combating late payment in commercial transactions applies to B2B transactions across the European Union. Creditors are entitled to statutory interest of at least 8 percentage points above the European Central Bank reference rate, plus a minimum fixed recovery fee of €40 per overdue invoice, claimable without a prior reminder.
LPCDA 1998 governs B2B late payments in the United Kingdom. The statutory interest rate is the Bank of England base rate plus 8 percentage points. Creditors can also claim a tiered fixed recovery fee: £40 on invoices up to £999.99, £70 on invoices from £1,000 to £9,999.99, and £100 on invoices of £10,000 or more.
The United States has no single federal statute equivalent to EU Directive 2011/7 or UK LPCDA 1998. US late fees are governed by the contract between the parties and capped by each state's usury law. Most US jurisdictions permit a reasonable rate (often 1.0%–1.5% per month). Always check your state's usury cap before setting a rate.
Simple interest applies the annual rate linearly to the number of days overdue. Daily compounding adds the accrued interest to the principal each day, producing a slightly higher total on long overdues. The calculator supports both modes so you can match whichever method your contract specifies.
Last reviewed: April 2026 by the PayShield team. This reference is for general information only and is not legal advice - consult a lawyer in your jurisdiction before charging late fees or pursuing legal action.
// frequently asked questions
It depends on your jurisdiction. In the EU, Directive 2011/7 entitles creditors to at least 8 percentage points above the European Central Bank reference rate, plus a €40 fixed fee. In the UK, LPCDA 1998 allows the Bank of England base rate plus 8 percentage points plus a tiered fixed fee. In the US, late fees are contract-governed and must comply with state usury caps.
Under EU Directive 2011/7 on combating late payment in commercial transactions, the statutory rate is at least 8 percentage points above the European Central Bank reference rate. Creditors are also entitled to a minimum fixed recovery fee of €40 per overdue invoice, without the need for a prior reminder.
LPCDA 1998 allows UK B2B creditors to charge the Bank of England base rate plus 8 percentage points as statutory interest on overdue invoices. It also allows a tiered fixed recovery fee: £40 for invoices up to £999.99, £70 for invoices from £1,000 to £9,999.99, and £100 for invoices of £10,000 or more.
The United States has no single federal late-payment statute equivalent to EU Directive 2011/7 or UK LPCDA 1998. US late fees are almost always governed by the contract between the parties, and the enforceable rate is capped by each state's usury laws. Always check your state's usury cap before setting a rate.
It depends on the law and the contract. EU Directive 2011/7 does not explicitly mandate compounding, so most EU courts apply simple interest unless the contract states otherwise. In the UK, LPCDA 1998 interest is simple by default. The PayShield calculator supports both simple and daily-compounding modes so you can match your contract.
A contractual late fee is whatever rate both parties agreed to in the signed contract. A statutory late fee is the rate a jurisdiction grants creditors by default when no contract rate is specified (or when the statutory rate is higher). EU and UK creditors can claim statutory interest even if the contract is silent on late fees.
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