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Payment Reminder Fees & Interests

Claiming reminder fees and interest is not always easy to figure out if you can charge a reminder fee. And if so, how much can you charge?

"If you do not make the payment, we will charge you a compensation of 10% and interest, up to 1% per month, per article x of our conditions of sale. ยป

This standard phrase appears on many reminders. But are these rates realistic? Can you claim 2,500 euros (or dollars) in compensation on a bill of 25,000 euros (or dollars)? And from when?

Nowadays, we have the impression that companies charge these costs quite freely. The big players sometimes charge fees from the first reminder. Small independents often threaten but do not claim interest afterward.

The general rule is that you can charge the reminder costs stated in your general terms and conditions, which your customer accepted when he ordered your goods or services.

But what reminder costs can reasonably be stated in your general terms and conditions? You should discuss this with the specialist lawyer who draws them up. In principle, you are free to choose the tariff. But it is best not to exaggerate because if you do, your fares will be irrevocably refused by the court. Companies often apply the taxes in force in the sector.

The final decision follows when the collection file goes before the judge. The judge decides whether the costs you charge are reasonable.

Two Types of Costs

Reminder Costs

These cover the costs of setting up and sending reminders. Amounts of 4, 5, 7 euros, or more per reminder are realistic amounts.

Each company can decide for itself how many reminder fees it charges for outstanding amounts.

These collection costs are usually fixed in a flat-rate compensation package. The law requires this to be clearly stated in the general terms and conditions, of which the customer is informed.

If the reminder and reminder costs are not explicitly stated in the terms and conditions of the invoice, you can only claim the actual costs of your reminder.

For European companies, the Directive 2000/35/EC further stipulates that the creditor, in addition to this fixed amount, may claim reasonable compensation for all collection costs exceeding this fixed amount.

You will sometimes see in the general conditions:

"... a conventional interest of 1.2% per month shall apply by law to the amount of the invoice and without notice of default."


Invoices paid late may be increased by a percentage of the invoice amount. Compensation of 10 to 15% of the invoice amount is customary. But some companies sometimes ask for more: up to 20%.

Customers can ask for an adjustment of the tariff when negotiating the general terms and conditions. Afterward, they can do nothing more.

You can also charge a minimum cost to prevent late payment of small invoices and increase, regardless of the percentage, the invoice amount by, for example, a minimum of 150 euros (or dollars).

Check what is customary in your sector regarding percentages and minimum costs. If you have not agreed on a percentage, the legal interest rate for late payment applies. This is the interest rate that the European Central Bank applies for basic refinancing transactions plus eight percentage points. This interest rate is reviewed every six months.

The Court Decides

Does your client think he has to pay too much interest on unpaid bills? If so, he can only go to one party: the judge.

If you summon your debtor before the judge, the judge can also object to your rates if he or she thinks they are excessive.

Only the court can decide whether or not the compensation is excessive. But not all judges agree. Some will think that 17% of compensation is reasonable, while others will declare it null and void.

"Not all judges are of the same opinion. Some will say 17% is reasonable; others will say it's void."

It's easy to avoid this uncertainty by setting a realistic percentage in your terms and conditions. This will increase the chances of getting paid and reduce the risk of costly court decisions.