How to calculate default interest: the formula
Default interest compensates you for money that arrives late. It accrues from the first day of default until payment and is calculated day by day:
Default interest = claim × interest rate × days in default ÷ 365
The rate is an annual rate. Thirty days in default therefore cost one twelfth of the annual rate, not the full rate. Use 365 days even in leap years; that is common practice and the difference is a matter of cents. The default interest calculator above applies exactly this formula and splits the period automatically if the base rate changes in between.
The rate: base rate plus 5 or 9 percentage points
The default interest rate is set in section 288 of the German Civil Code (BGB) and depends on who owes the money:
- Consumers: 5 percentage points above the base rate (section 288 (1) BGB).
- Businesses and public authorities: 9 percentage points above the base rate, provided no consumer is involved (section 288 (2) BGB).
The base rate (Basiszinssatz) under section 247 BGB is set by the Deutsche Bundesbank on 1 January and 1 July. Since 1 July 2026 it has been 1.52 percent, in the first half of 2026 it was 1.27 percent. For the second half of 2026 this gives a default rate of 6.52 percent towards consumers and 10.52 percent towards businesses. The full table since 2013 is available in the calculator under “Show base rates”; it is the same source the calculator uses.
A higher rate may be agreed by contract, for example in terms of delivery between businesses. Towards consumers a higher rate in standard terms is usually invalid. A lower rate may be agreed; the statutory rates are minimum values that apply without any agreement.
When does default interest start? Determining the start of default
The most common mistake is not the formula but the start date. Interest accrues only from default, not from the invoice date and not from the due date. Under section 286 BGB default begins:
- through a reminder after the due date: default starts the day after the reminder is received;
- without a reminder if the payment date is fixed by calendar (“payable by 15 March”): default starts the day after that date;
- at the latest 30 days after the due date and receipt of the invoice; towards consumers only if the invoice expressly points this out.
If the invoice merely says “payable immediately” without a date, default without a reminder therefore begins only after 30 days. A fixed date saves those 30 days. Which reminder triggers default and which dunning fees are then permitted is explained in the guide on dunning fees.
Worked example with the current base rate
A business customer owes EUR 2,500, payable by 1 June 2026. Default begins on 2 June, payment arrives on 31 July 2026. The period includes the rate change on 1 July:
- 2 to 30 June 2026: 29 days, base rate 1.27 plus 9, that is 10.27 percent: 2,500 × 0.1027 × 29 ÷ 365 = EUR 20.40
- 1 to 31 July 2026: 31 days, base rate 1.52 plus 9, that is 10.52 percent: 2,500 × 0.1052 × 31 ÷ 365 = EUR 22.34
- Total default interest: EUR 42.74, plus the flat default fee of EUR 40 under section 288 (5) BGB
If the debtor were a consumer, the rate would be 6.27 and 6.52 percent, the interest EUR 26.30, and the flat fee would not apply.
Flat default fee and dunning costs come on top
Default interest is only part of the loss caused by default. Towards businesses and public authorities you are additionally entitled to the flat default fee of EUR 40, once per claim and without proof of loss. It is credited against later lawyer’s or collection costs and may not be charged to consumers.
Dunning costs may be charged for reminders sent after default, but only in the amount of the actual cost, in practice a few euros per letter. The calculator optionally adds both items to the total claim. Interest, the flat fee and dunning costs are not subject to VAT, because they are compensation.
Showing default interest on the reminder
So that the customer can verify the amount, the reminder should state: principal, start of default, interest rate, number of days in default and the interest amount, separately from dunning costs and the flat fee. Many companies charge interest only with the final reminder or on handover to collection, because small amounts strain the customer relationship more than they earn. How the dunning levels build on each other is shown in the guide on dunning levels; what follows the final reminder in the guide what happens after the final reminder.
Calculating default interest automatically with acucollect
In acucollect, the receivables management software by RLOX (product page in German), you define per dunning level whether and from when interest, dunning fees and the flat default fee are charged. The dunning runs determine the days in default from the invoice’s due date and payment terms, distinguish consumers from businesses and insert the amounts into the reminder text via placeholders. Incoming payments from your accounting or bank account end the interest period automatically.
