Charging Interest on Overdue Invoices: How Much + Template Language
You have the right to charge interest when clients pay late. Most freelancers never do it — but even just stating the possibility in your invoice significantly speeds up payments. Here's how to do it properly.
Can you charge interest on overdue invoices?
Yes — if you disclosed the interest terms in advance. The rules vary by jurisdiction:
How to calculate invoice interest
Use this formula:
Interest = Principal × Annual Rate × (Days Overdue / 365)
| Invoice | Rate | Days overdue | Interest |
|---|---|---|---|
| €5,000 | 12% p.a. | 30 days | €49.32 |
| €10,000 | 12% p.a. | 45 days | €147.95 |
| £2,500 | 12.5% p.a. | 60 days | £51.37 |
| €1,000 | 18% p.a. | 90 days | €44.38 |
How to add interest charges to your invoice
Step 1: State your late payment terms on the original invoice:
Step 2: When sending a follow-up invoice with accumulated interest, add a line item:
Document the calculation clearly so the client understands exactly what they owe and why.
When to charge vs when to waive
NL: Handelsrente vs incassokosten
In the Netherlands, two separate claims exist on overdue B2B invoices:
Wettelijke handelsrente
Statutory commercial interest rate. Set quarterly by ECB + 8% for B2B. Accrues daily from the due date. Currently ~12% p.a.
WIK incassokosten
Fixed debt collection costs under the Wet Incassokosten. Minimum €40, scaling based on invoice amount. Separate from interest.
Chaser stage 4 references your legal rights automatically
Chaser's final notice email (day 30) automatically references statutory interest rights and debt recovery costs for UK and EU clients. You don't need to add them manually — and the signal that you know your rights often motivates payment.
Try Chaser free →Frequently asked questions
Can you legally charge interest on overdue invoices?
Yes, in most jurisdictions, provided you disclosed the interest terms in advance — either in your invoice terms or in your contract. In the UK and EU, statutory interest rights exist by law for B2B transactions even without a contract. In the US, you need a contractual clause (typically stated on the invoice: 'Invoices unpaid after [X] days are subject to [X]% monthly interest').
How do you calculate interest on an overdue invoice?
Use this formula: Interest = Principal × Annual Rate × (Days Overdue / 365). Example: €10,000 invoice at 12% annual rate, 45 days overdue: €10,000 × 0.12 × (45/365) = €147.95. For monthly rate (e.g. 1.5%/month): €10,000 × 0.015 × (45/30) = €225.00.
What is a reasonable interest rate for late invoices?
For contractual late payment interest, 1.5%–2% per month (18–24% annually) is standard in the US. In the UK, statutory rate is Bank Rate + 8% (~12.5% p.a. in 2026). In the Netherlands, wettelijke handelsrente is set quarterly (currently ~12% p.a.). In the EU generally, statutory rate is ECB reference rate + 8%.
Do I have to charge interest on overdue invoices?
No. Even if you have the legal right to charge interest, it's always your choice whether to exercise it. For good clients who are late for the first time, waiving interest preserves the relationship. For repeat offenders or large amounts, claiming interest sends an important signal.
What is the difference between late payment interest and incassokosten (NL)?
In the Netherlands, wettelijke handelsrente is the statutory interest rate on the overdue amount, calculated daily from the due date. Incassokosten (WIK costs) are a separate fixed compensation for debt collection costs — €40 minimum on invoices up to €267, scaling up to €6,775 on large invoices. Both can be claimed on top of the original invoice amount.