When another business or a public body pays you late in Ireland, you're entitled to statutory interest at 10.4% a year from 1 July 2026, plus fixed compensation of €40, €70 or €100 depending on the invoice amount, without sending a reminder first. These rights come from the European Communities (Late Payment in Commercial Transactions) Regulations 2012 (S.I. 580 of 2012) and don't apply to consumers. If no payment date was agreed, payment is due 30 days after you deliver or the customer receives the invoice, whichever is later.
In this article
The short version
- Late business invoices carry statutory interest of 10.4% a year from 1 July 2026.
- Fixed compensation is €40, €70 or €100 depending on the invoice amount.
- No reminder is needed before interest and compensation become due.
- Without an agreed date, payment is due 30 days after invoice or delivery.
- The late payment rules don't apply to consumers.
Your rights in one line each
Each of these is a rule you can rely on in a sale to another business or a public body. The sections below give the detail and the exceptions.
- Interest on a late payment runs from the day after the payment date until you're paid.
- You don't need to send a reminder before interest or compensation becomes due.
- The statutory interest rate is the European Central Bank's main refinancing rate plus 8%, which is 10.4% a year from 1 July 2026.
- Fixed compensation is €40 on an invoice up to €1,000, €70 on one over €1,000 and up to €10,000, and €100 on one over €10,000.
- You don't have to prove you spent anything to claim the fixed compensation.
- Reasonable recovery costs above the fixed amount, such as a solicitor's or debt collection agency's fees, can be claimed on top.
- Where no payment date was agreed, payment is due 30 days after the later of receiving the invoice or delivery.
- Between businesses, a payment term over 60 days has to be expressly agreed and must not be grossly unfair to you.
- None of this applies when your customer is a consumer.
Who the late payment rules cover
The Regulations apply to commercial transactions, which they define as transactions between businesses, or between a business and a public authority. A public authority means government or other public administration at national, regional or local level, and it includes Government Ministers and the HSE.
Sales to consumers are outside the Regulations. A consumer, for this purpose, is a person acting outside their trade, business or profession, so a homeowner who hires a plumber or a private client who instructs a solicitor isn't covered. You can't add statutory interest or compensation to those invoices.
The Regulations also don't apply to contracts made before 16 March 2013. For those, the 2002 Regulations they replaced still apply while the contract is in force.
When an invoice becomes late
An invoice becomes late the day after its payment date passes. The payment date is the one you agreed, if you agreed one, so it helps to put an actual date on every invoice and in your terms of business.
If no date was agreed, the Regulations set a default of 30 calendar days after the later of the customer receiving the invoice or the goods or services being delivered. If your contract includes an acceptance or verification step and the invoice arrives on or before it, the 30 days run from the date of acceptance or verification instead. That step itself can't take more than 30 calendar days from delivery unless the contract expressly says otherwise and the longer period isn't grossly unfair to you.
Between businesses, you can agree terms longer than 60 calendar days from delivery, but only if they're expressly agreed in the contract and aren't grossly unfair to you.
For public bodies, the amended Regulations set a ceiling of 60 calendar days from delivery for terms agreed with a public authority. Guidance from the Department of Enterprise, Tourism and Employment describes the limit as 30 days, and the explanatory note to the Regulations describes 30 days as the standard, so if a public body's payment term is in dispute, take advice on which applies to your contract.
Separately, the Government's prompt payment policy asks public bodies to pay suppliers within 15 calendar days of receiving a valid invoice. It covers government departments, the HSE, local authorities, State agencies and other public bodies except commercial semi-State bodies. It's an administrative policy rather than law and doesn't change your contract.
Interest and compensation you can claim
Statutory interest is set at the European Central Bank's main refinancing rate plus 8%. The ECB rate in force on 1 January and 1 July sets the statutory rate for the following six months, which gives 10.4% a year from 1 July 2026. The Department of Enterprise, Tourism and Employment publishes the rate for each half-year, so check it before you calculate interest.
Interest runs from the day after the payment date until the day you're paid, and you're entitled to it without sending a reminder.
Fixed compensation for recovery costs sits on top of interest and is set by invoice amount.
| Invoice amount | Fixed compensation |
|---|---|
| Up to €1,000 | €40 |
| Over €1,000, up to €10,000 | €70 |
| Over €10,000 | €100 |
As a worked example, a €4,500 invoice paid late carries €70 in fixed compensation, plus interest at the statutory rate from the day after its payment date until payment arrives.
You don't need to show that you incurred any cost to claim the fixed amount. If recovering the debt costs more, for instance because you instruct a solicitor or a debt collection agency, the Regulations let you claim reasonable compensation for those costs above the fixed sum.
Contract terms that try to change your rights
Businesses can agree an interest rate other than the statutory one, provided the interest that results isn't grossly unfair to the supplier. A customer's terms or purchase order can also try to push the payment date out or waive interest altogether.
Under Regulation 6, where a term waives or varies the payment date or the interest and is grossly unfair, a court or arbitrator considers all the circumstances of the case. Those include whether the term departs from good commercial practice, the bargaining strength of each side, and whether you knew about the term. The explanatory note to the Regulations, which isn't part of the law itself, says a clause excluding interest or compensation is held to be grossly unfair.
Before you sign, read a customer's payment terms for three things: the number of days, when the clock starts, and any line that excludes interest or compensation. If a term looks grossly unfair, take legal advice before relying on it or challenging it.
Steps to take when an invoice is overdue
Your rights don't depend on following a set process, but a consistent sequence makes each step easier to justify later. A typical order looks like this.
- Confirm the payment date, and that the customer received the invoice and the goods or services.
- Send a reminder on or soon after the due date, even though the law doesn't require one before interest runs.
- Work out the interest and fixed compensation, and decide whether you'll claim them or waive them for this customer.
- Send a statement or revised invoice showing the original amount, interest and compensation separately.
- Send a final demand. Citizens Information describes a 7-day demand letter before legal proceedings as usual practice, though not always a legal requirement.
- If the debt still isn't paid, choose the court by amount: the District Court for claims up to €15,000, the Circuit Court up to €75,000, and the High Court above that.
- Keep a record of what you spent recovering the debt, since reasonable costs above the fixed compensation can be claimed.
The Small Claims procedure can't be used here. It covers claims of €2,000 or less, but debt claims such as unpaid invoices are excluded from it.
How to claim interest and keep the customer
ISME's survey of SME owners for the first quarter of 2026 found they waited 44 days on average to be paid, 82% didn't charge interest on late payments, and 13% were afraid to charge for late payment in case they lost the customer. The survey had 80 respondents, so treat the figures as an indication rather than a measurement of every Irish business.
The worry about losing a customer tends to be easier to manage when the rules are set before an invoice goes out. Putting the payment date and a line about statutory interest in your terms means a later charge doesn't come as a surprise, and applying it the same way to every business customer can make it harder to read as personal. You can still waive it for a customer you've decided to treat differently, as long as that's a decision rather than an oversight.
Applying interest by hand tends to slip when the week gets busy. Adfin can add statutory late payment interest to overdue invoices between businesses automatically, with grace periods and waivers for individual customers. That's part of Enhanced credit control, which costs 0.3% per paid invoice, only when it's used, and also gives you Adfin's collection agents, which choose the timing, channel and tone of reminders within rules you approve.
The free Essential level of Adfin covers unlimited reminders by email, SMS and WhatsApp, statements and an aged debtors view, so you can see what each customer owes and give each overdue account an owner and a next step. Adfin is a certified Xero app and a certified QuickBooks app, with two-way sync.
Common questions
What is the late payment interest rate in Ireland? From 1 July 2026 the statutory rate is 10.4% a year, which is the European Central Bank's main refinancing rate plus 8%. The rate is reset on 1 January and 1 July each year.
Do I have to send a reminder before charging late payment interest? No, a reminder isn't needed. Interest and fixed compensation are due automatically from the day after the payment date in a sale to another business or a public body.
Can I charge late payment interest to consumers? The Regulations don't cover consumers, so statutory interest and compensation can't be added to invoices for individuals buying outside their trade, business or profession.
What is the default payment term in Ireland if none is agreed? Where no date was agreed, payment is due 30 calendar days after the later of the customer receiving the invoice or delivery of the goods or services.
Can I use the Small Claims procedure to recover an unpaid invoice? Debt claims, including unpaid invoices, are excluded from the Small Claims procedure. For an unpaid invoice, the District Court hears claims up to €15,000 and the Circuit Court claims up to €75,000.
Can a customer's contract stop me charging late payment interest? Businesses can agree a different rate, but a term that waives or varies interest or the payment date can be examined for gross unfairness by a court or arbitrator. Take legal advice if a customer relies on one.
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 - Prompt Payment Returns (accurate as of November 2026) https://enterprise.gov.ie/en/what-we-do/supports-for-smes/late-payments/prompt-payment-returns/
- ISME - Prompt Payments Report Q1 2026 (accurate as of November 2026) https://isme.ie/wp-content/uploads/2026/08/Q1-2026-Prompt-Payments.pdf
- 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/
