Late Payment Fees by Country: EU, UK and US Rules for Overdue Invoices

If a business client pays late, you may be entitled to more than the invoice amount, even if your contract never mentioned interest. In the EU and UK, the law adds statutory interest and a fixed compensation sum to late business-to-business payments. In the US, it's mostly up to your contract and state law.

This guide sets out the main rules by country, with links to primary sources, so you know what you can charge before you put it in a reminder. It applies to invoices between businesses, including freelancers and sole traders invoicing companies. Consumer invoices follow different rules.

This is general information, not legal advice. For a large or disputed debt, speak to a local lawyer.

The European Union: the Late Payment Directive

The EU's Late Payment Directive (2011/7/EU) sets a minimum standard that every member state has written into national law. For business-to-business invoices:

• Default payment period. If no date is agreed, payment is due 30 days after the debtor receives the invoice.
• Maximum agreed period. Contract terms over 60 days are allowed only if expressly agreed and not grossly unfair to the creditor.
• Statutory interest. At least the ECB reference rate plus 8 percentage points. The reference rate is the ECB main refinancing rate on the first calendar day of each half-year.
• Fixed compensation. At least €40 per late invoice, as compensation for recovery costs, with no need to prove the cost. You can also claim reasonable recovery costs above that.
• No reminder needed. Interest runs from the day after the due date.

For reference, Ireland's Department of Enterprise publishes the rate: from 1 July 2026, the ECB main refinancing rate was 2.40%, so the Irish statutory rate is 10.40% a year for the second half of 2026. Our EU late payment directive guide goes into more detail, and the EU late payment interest calculator does the maths.

Countries can go further than the minimum, and several do.

Ireland

Under the European Communities (Late Payment in Commercial Transactions) Regulations 2012 (S.I. No. 580/2012):

• interest at the ECB main refinancing rate plus 8 percentage points (10.40% from 1 July 2026, per DETE);
• fixed compensation of €40 for debts up to €1,000, €70 for €1,000 to €10,000, and €100 above €10,000.

Germany

Under § 288 of the German Civil Code (BGB):

• interest on late B2B payments at 9 percentage points above the base rate (Basiszinssatz), one point more than the EU minimum;
• a fixed €40 lump sum (§ 288(5) BGB).

The Bundesbank publishes the base rate twice a year.

France

Under Article L441-10 of the Commercial Code:

• unless the contract sets otherwise, late penalties equal the ECB refinancing rate plus 10 percentage points, and a contract can't set them below three times the legal interest rate;
• a fixed €40 indemnity for recovery costs (Article D441-5);
• penalties are due without a reminder;
• agreed payment terms can't exceed 60 days from the invoice date, or 45 days end of month if expressly agreed.

French invoices between businesses must state the late penalty rate and the €40 indemnity. If you invoice French clients, add both.

Other EU countries

Most other member states apply the directive's minimum: ECB reference rate plus 8 points and €40. This includes the Netherlands (wettelijke handelsrente), Spain (Ley 3/2004), Italy (Decreto legislativo 231/2002) and Slovenia (ZPreZP-1). Check the national rule if your contract is governed by that country's law, because details like start dates and higher compensation tiers can differ.

The United Kingdom

Under the Late Payment of Commercial Debts (Interest) Act 1998, for business-to-business debts:

• Statutory interest at 8% above the Bank of England base rate. The reference rate is the base rate in force on 31 December (for debts that become late between January and June) or on 30 June (for July to December).
• Fixed compensation per invoice: £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more.
• Reasonable recovery costs above the fixed sum may also be claimed.
• Default period. If no date is agreed, interest can start 30 days after the later of delivery and receipt of the invoice.

The UK government's guidance is on GOV.UK under "Late commercial payments: charging interest and debt recovery". Our UK late payment guide covers calculating it, and how to charge statutory interest shows how to add it to a reminder.

The United States

There's no general federal late payment law for private business invoices. What you can charge depends on:

• Your contract. A late fee or interest rate is generally enforceable if the client agreed to it before the work started. Put it in the contract and on every invoice.
• State law. States cap interest rates (usury laws) and some limit late fees. The limits vary widely, so check the state whose law governs your contract.
• Freelancer protection laws. New York State, New York City, Illinois, California, Los Angeles and several other places require written contracts above a threshold and payment within 30 days of completing the work if no date was set. Some allow double damages for unpaid invoices. See our US freelancer payment laws guide.
• Federal government work. The Prompt Payment Act requires federal agencies to pay interest on late payments to contractors, at a rate set by the Treasury every six months.

Without a contract clause, you can still sue for the unpaid amount, and courts may award pre-judgment interest under state law, but you can't simply add a fee the client never agreed to.

How to put this on your invoices

A short line on every invoice makes the rules visible and gives your reminders something to point to:

EU (general):

Late payments incur statutory interest at the ECB reference rate plus 8 percentage points and fixed compensation of €40 under Directive 2011/7/EU.

UK:

We reserve the right to claim interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998.

US:

Invoices unpaid after the due date accrue a late fee of 1.5% per month, as agreed in our contract dated 3 February 2026.

Only use the US line if your contract actually includes the fee and the rate is lawful in your state. More wording options are in late fee wording on an invoice.

Should you actually charge it?

Knowing your rights is useful even if you don't use them. In practice:

• Mention it, don't lead with it. A first reminder that opens with interest damages goodwill for an invoice that was probably just missed.
• Use it when an invoice is clearly overdue and the client has stopped replying, or for repeat late payers.
• Waive it in exchange for payment. "If paid by Friday, I'll waive the statutory interest" is often the fastest way to close an old invoice.

Our guide to using late payment law without burning clients has scripts for each stage.

FAQ

Can I charge a late fee if it's not in my contract?

In the EU and UK, yes, statutory interest and fixed compensation apply to B2B debts automatically. In the US, generally only if the client agreed to it.

How much is the late payment fee in the EU?

At least €40 per invoice plus interest of the ECB reference rate plus 8 percentage points. Some countries set more, such as Germany (base rate plus 9 points) and France (ECB rate plus 10 points).

How much is the UK late payment fee?

£40, £70 or £100 per invoice depending on its size, plus interest at 8% above the Bank of England base rate.

Do these rules apply to consumers?

No. The EU and UK rules above apply to business-to-business transactions.

Keep reminders polite and the law in reserve

DueChat sends polite reminders in your name at 7, 14 and 30 days overdue, with your payment link, and stops as soon as the invoice is paid. You decide when, or whether, to mention interest. €19/month or €190/year after a 30-day trial. See how reminders work.