If another business or a public body pays you late, you're entitled to statutory interest on the overdue amount, at 10.4% a year from 1 July 2026. The rate is the European Central Bank's main refinancing rate plus 8%, it counts from the day after the payment date until you're paid, and no reminder is needed. Consumers are outside these rules, and a new rate applies from each 1 January and 1 July.
In this article
The short version
- Statutory interest applies when businesses or public bodies pay late.
- The rate is 10.4% a year from 1 July 2026.
- Interest runs from the day after the payment date.
- No reminder is needed before interest becomes due.
- Consumers are outside the late payment rules.
Five checks before you add interest
The right to interest comes from the European Communities (Late Payment in Commercial Transactions) Regulations 2012 (S.I. 580 of 2012). Before you add it to any invoice, run through these five checks.
- Check the customer is a business or a public body. The Regulations cover transactions between businesses and between a business and a public authority, which includes government departments, local authorities, Ministers and the HSE. A person buying outside their trade, business or profession is a consumer, and statutory interest doesn't apply.
- Check the contract was made on or after 16 March 2013. Earlier contracts that are still running fall under the 2002 Regulations instead.
- Find the payment date. Use the date you agreed. Without an agreed date, the Regulations fix it at 30 calendar days from whichever comes later, delivery or the customer receiving your invoice.
- Confirm that date has passed, since interest starts the day after it.
- Look for a different rate in your contract. Businesses can agree their own rate, as long as the result isn't grossly unfair to the supplier.
If the first two checks are met and the payment date has passed, interest is already running. You don't have to warn the customer, and you don't have to wait for a second invoice.
How the rate and the dates work
The statutory rate is the European Central Bank's main refinancing rate plus 8%. Each half-year's figure follows the ECB rate in force on 1 January or 1 July, and the Department of Enterprise, Tourism and Employment publishes the result. From 1 July 2026 the rate is 10.4% a year.
Because the rate can change twice a year, a figure you used last spring may be out of date. Check the Department's published rate before you calculate, and note on your statement which rate you've used.
A full year's interest at 10.4% on a €3,000 invoice would be €312, so an invoice paid about a month late carries roughly a twelfth of that, or around €26. Interest keeps running until the amount is paid. If a customer pays only part of an invoice, take advice on how to work out interest on the balance.
On top of interest, a business or public body that pays late owes fixed compensation for recovery costs: €40 on amounts up to €1,000, €70 over €1,000 and up to €10,000, and €100 above that. You can claim both, and neither needs a reminder.
Contract terms that change the interest
Your customer's terms can try to change your entitlement, and so can yours. Read any contract or purchase order for these points before you sign.
- Businesses can agree a different interest rate, provided the interest it produces isn't grossly unfair to you as the supplier.
- A clause may try to remove interest or compensation altogether. A court or arbitrator can look at whether a term that waives or varies interest is grossly unfair, taking into account good commercial practice, each side's bargaining strength and whether you knew about the term. The explanatory note published with the Regulations, which sits outside the law itself, treats a clause that excludes interest or compensation as grossly unfair.
- Between businesses, a payment term of more than 60 calendar days from delivery has to be expressly agreed and must not be grossly unfair to you.
- For public bodies, the operative text caps agreed terms at 60 calendar days from delivery, though the Department's guidance refers to 30 days. Take advice if a public body's term is in dispute.
A Government policy also asks public bodies to pay suppliers within 15 calendar days of a valid invoice arriving. That policy is administrative, so it doesn't alter your contract or your right to interest.
How to add interest without souring the relationship
Plenty of Irish businesses are entitled to interest and don't claim it. Of the 80 SME owners in ISME's Q1 2026 prompt payments survey, 82% said they didn't charge interest on late payments, and 13% said they were afraid to in case they lost the customer.
A few habits tend to make interest easier to apply without it feeling personal.
- Mention statutory interest in your terms and on your invoices, so it doesn't arrive as a surprise.
- Apply it the same way to every business customer, and record any waiver as a decision.
- Show interest as its own line on a statement, separate from the original amount.
- Allow a short grace period if you'd rather not charge on an invoice that's a day or two late.
If you'd rather not work the interest out by hand, Adfin can apply statutory interest to overdue business invoices for you, with a grace period you set and the option to waive it for particular customers. It's part of Enhanced credit control, which costs 0.3% per paid invoice and is charged only when you use it, alongside Adfin's collection agents working within rules you approve.
Common questions
What rate of late payment interest applies in Ireland now? The rate has been 10.4% a year since 1 July 2026, made up of the ECB main refinancing rate plus 8%. A new rate takes effect each 1 January and 1 July, published by the Department of Enterprise, Tourism and Employment.
Do I need interest in my terms to charge it? The right to statutory interest comes from the Regulations, not your terms, and needs no reminder. Putting it in your terms still helps customers expect it.
Can I charge interest to a consumer? Statutory late payment interest doesn't apply to consumers. Take advice before adding any interest charge to invoices for individuals.
Can I charge a higher interest rate than the statutory one? Businesses can agree a different rate, provided the result isn't grossly unfair to the supplier. Take legal advice before relying on a rate above the statutory one.
Can I charge interest to a public body? The Regulations cover transactions between a business and a public authority, including government departments, local authorities and the HSE, so statutory interest applies when they pay late.
When does late payment interest stop? Interest runs from the day after the payment date until the day the invoice is paid in full.
Sources
- Irish Statute Book - S.I. No. 580/2012, European Communities (Late Payment in Commercial Transactions) Regulations 2012 (accurate as of November 2026) https://www.irishstatutebook.ie/eli/2012/si/580/made/en/print
- Irish Statute Book - S.I. No. 196/2014, European Communities (Late Payment in Commercial Transactions) (Amendment) Regulations 2014 (accurate as of November 2026) https://www.irishstatutebook.ie/eli/2014/si/196/made/en/print
- Department of Enterprise, Tourism and Employment - Late Payment Interest Rate (accurate as of November 2026) https://enterprise.gov.ie/en/what-we-do/supports-for-smes/late-payments/late-payment-interest-rate-
- Department of Enterprise, Tourism and Employment - Late Payment in Commercial Transactions (accurate as of November 2026) https://enterprise.gov.ie/en/What-We-Do/Supports-for-SMEs/Late-Payments/Late-Payment-in-Commercial-Transactions/
- ISME - Prompt Payments Report Q1 2026 (accurate as of November 2026) https://isme.ie/wp-content/uploads/2026/08/Q1-2026-Prompt-Payments.pdf
