€40 extra, without proof
Since 29 July 2014 German law has contained a rule that many businesses do not know or do not use: whoever has a payment claim against a debtor who is not a consumer can, in case of default, demand a flat fee of €40 in addition to interest (§ 288(5) BGB). You do not have to prove any loss. The rule goes back to the EU Late Payment Directive and is meant to encourage punctual payment in business.
The requirements
- Payment claim: it concerns payment for goods or services, i.e. the classic invoice amount. Claims for damages or repayment are not included.
- Debtor is not a consumer: the fee applies against companies, self-employed people, associations or public bodies, not against private individuals.
- Default: the debtor must be in default under § 286 BGB, e.g. through a reminder, a payment deadline fixed by the calendar or expiry of the 30-day period.
- New law: the obligation must have arisen after 28 July 2014 (Art. 229 § 34 EGBGB).
According to the wording, it does not matter whether the creditor itself is a business. What counts is that the debtor is not a consumer.
Per invoice, including instalments
The fee applies to each payment claim on which the debtor is in default. With three late invoices, it is three times €40. The law expressly states that this also applies to instalments and other part payments.
Example: a cleaning company sends an office three monthly invoices of €180, €220 and €150. Default starts on 1 Jul, 15 Jul and 1 Aug 2026; everything is paid on 1 Sep 2026. Default interest at 10.52% amounts to €3.22, €3.04 and €1.34, together €7.60. The flat fees add up to €120. With small amounts the fee is therefore far more important than the interest.
Whether one fee per invoice is always appropriate for very many tiny invoices is partly debated in the legal literature. The wording of the law, however, refers to each individual payment claim.
Set-off against lawyer fees
The fee compensates for the effort of collection. It is therefore set off against damages owed insofar as the damage consists of legal costs (§ 288(5) sentence 3 BGB). If you instruct a lawyer for the same claim and demand the lawyer fees as damages, the €40 is deducted. So you do not receive the fee on top of the full legal costs.
Other losses, such as interest on an overdraft, are not set off against the fee.
No exclusion by standard terms
An agreement made in advance that excludes or limits the right to the fee is void if it is grossly unfair to the creditor. An exclusion of the fee is presumed to be grossly unfair (§ 288(6) BGB). Clauses in the purchasing terms of large customers that exclude the fee therefore often do not hold.
When there is no flat fee
- The debtor is a consumer.
- The obligation arose before 29 July 2014.
- It is not a payment claim.
- Employment: in 2018 the Federal Labour Court ruled that employees cannot claim the fee for late wages, because legal costs are not reimbursed in first-instance labour court proceedings (BAG, judgment of 25 Sep 2018, 8 AZR 26/18).
How to use the flat fee
Include the fee in the first reminder as soon as the debtor is in default. Possible wording: “Pursuant to § 288(5) BGB we additionally charge you a late payment flat fee of €40.00.” In the late payment interest calculator the fee is preselected for businesses and shown per invoice. How to enforce the whole claim is covered in the article Claiming late payment interest. This article is not legal advice.