When a business or public body pays you late, you can claim fixed compensation of €40 if the late amount is €1,000 or less, €70 if it's over €1,000 and up to €10,000, and €100 if it's over €10,000. You don't need to prove any cost or send a reminder, and the compensation comes on top of statutory interest. If recovering the debt costs you more, you can also claim reasonable recovery costs above the fixed sum.
In this article
The short version
- Fixed compensation is €40, €70 or €100 by late amount.
- You don't need to prove any recovery costs.
- Compensation is due on top of statutory interest.
- Reasonable recovery costs above the fixed sum can also be claimed.
- Compensation can't be added to invoices for consumers.
The compensation bands
The amounts are set in the Schedule to the European Communities (Late Payment in Commercial Transactions) Regulations 2012 (S.I. 580 of 2012). They're fixed sums in the Regulations and don't move with interest rates.
| Late amount | Fixed compensation | Examples |
|---|---|---|
| €1,000 or less | €40 | €350, €1,000 |
| Over €1,000, up to €10,000 | €70 | €1,000.01, €4,800, €10,000 |
| Over €10,000 | €100 | €10,000.01, €25,000 |
The edges of each band are easy to misread: an invoice of exactly €1,000 falls in the first band and carries €40, while one cent more moves it into the €70 band. The same applies at €10,000, which still carries €70.
Rules for claiming compensation
Each of these rules comes from the Regulations or from the Department of Enterprise, Tourism and Employment's guidance on them.
- Compensation applies only to commercial transactions, meaning sales between businesses or between a business and a public authority.
- Consumers are outside the Regulations, so you can't add compensation to an invoice for a person buying outside their trade, business or profession.
- The Regulations apply to contracts made on or after 16 March 2013.
- Compensation becomes due as soon as the payment is late, without a reminder.
- You don't have to show that you spent anything to claim the fixed sum.
- Compensation is claimed on top of statutory interest, not instead of it.
- If your actual recovery costs are higher, you can claim reasonable compensation for costs above the fixed sum, which can include instructing a solicitor or using a debt collection agency.
A customer's terms may try to exclude compensation. Courts and arbitrators can test a term like that for gross unfairness. The explanatory note issued with the Regulations goes further and describes a clause excluding compensation as grossly unfair, though the note itself isn't law. If a customer relies on one, take legal advice.
Interest is worked out separately, at 10.4% a year from 1 July 2026, which is the ECB main refinancing rate plus 8% and is revised every January and July. Interest grows with every day an invoice is late, while the compensation is a fixed sum, so on a small invoice paid a few weeks late the compensation can be worth more than the interest.
How to claim it, step by step
You don't need a form or a court order to ask for compensation. If you decide to claim it, these steps keep the claim clear and easy for the customer to check.
- Confirm the customer is a business or public body, and that the payment date has passed. If no date was agreed, payment was due 30 calendar days after the later of the customer receiving your invoice or delivery.
- Find the band for the late amount using the table above.
- Work out the interest to date, at the rate in force, from the day after the payment date.
- Send a statement or letter showing the original invoice, the interest and the compensation as separate lines, with the basis for each.
- Keep a record of any extra costs you take on to recover the debt, such as a solicitor's letter or an agency's fee, in case you claim reasonable costs above the fixed sum.
- If the invoice still isn't paid, send a final demand with a deadline. According to Citizens Information, a 7-day demand letter is the usual step before proceedings, although the law doesn't always require one.
- If you go to court, choose it by amount. The District Court hears claims up to €15,000, the Circuit Court up to €75,000 and the High Court anything above. Debt claims such as unpaid invoices are excluded from the Small Claims procedure.
You can also decide not to claim compensation from a customer you want to keep on good terms. Many small businesses don't charge for late payment at all. In ISME's first-quarter 2026 survey, 82% of the 80 SME owners who responded didn't charge interest on late payments, and 13% were afraid that charging would lose them the customer. If you waive it, make that a recorded decision rather than an oversight, so you can apply the same rule next time.
The interest side can run without anyone remembering to add it. Adfin can apply statutory late payment interest to overdue business invoices automatically, with grace periods and waivers for individual customers, as part of Enhanced credit control at 0.3% per paid invoice, charged only when it's used. Adfin's free Essential level gives you unlimited email, SMS and WhatsApp reminders, statements, and an aged debtors view of what each customer owes.
Common questions
How much compensation can I claim for a late invoice in Ireland? The fixed sum is €40 on a late amount of €1,000 or less, €70 on amounts over €1,000 and up to €10,000, and €100 on amounts over €10,000. It applies to invoices to businesses and public bodies.
Do I need to prove what late payment cost me? The Regulations say you don't need to show any recovery costs to claim the fixed sum. Evidence matters only if you claim reasonable costs above it.
Can I claim compensation and interest together? Compensation is due on top of statutory interest, so you can claim both on the same late invoice.
Can I claim compensation from a consumer? Consumers fall outside the Regulations, so compensation can't be added when your customer is an individual buying for personal use rather than for a trade, business or profession.
Can I claim more than €100? Beyond the fixed sum, you can claim reasonable compensation for recovery costs, such as instructing a solicitor or a debt collection agency.
Do I have to send a reminder before claiming compensation? Compensation, like statutory interest, is due without a reminder once the payment date has passed.
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
- Department of Enterprise, Tourism and Employment - Compensation for Recovery Costs (accurate as of November 2026) https://www.enterprise.gov.ie/en/What-We-Do/Supports-for-SMEs/Late-Payments/Compensation-for-Recovery-Costs-
- 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-
- Citizens Information - Court proceedings for recovering debts (accurate as of November 2026) https://www.citizensinformation.ie/en/money-and-tax/personal-finance/debt/court-procedures/
- ISME - Prompt Payments Report Q1 2026 (accurate as of November 2026) https://isme.ie/wp-content/uploads/2026/08/Q1-2026-Prompt-Payments.pdf
