iHow it is calculated
A contract penalty is found from the base amount, the daily rate and the days late:
penalty = amount × daily rate × days
For £20,000 at 0.1% a day over 30 days: 20,000 × 0.1% × 30 = £600 penalty, a £20,600 total.
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Legal · Updated 2026
Contract Penalty Calculator
Work out a contract penalty or liquidated damages on an overdue obligation, from the daily or fixed rate and the number of days late.
Enter your data
£
%
days
Enter the amount, the rate and the days. Tick the cap if the penalty cannot exceed the principal.
=Penalty
300£
Base amount10,000 £
Per day10 £
Total to pay10,300 £
A contract penalty (liquidated damages) is a daily rate over the days late, or a one-off fixed percentage, as the contract provides. English law will not enforce a clause that is a penalty rather than a genuine pre-estimate of loss.
Penalty 300 £Indicative legal figures, not advice. Results are estimates — final decisions rest with the court and depend on the specific case. Check the law in force. Instant in-browser calculation, no account.
§ Results are for informational purposes and do not constitute legal advice. For specific situations, consult a lawyer or a notary.
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?Frequently asked questions
What is a contract penalty?
It is a sum the parties agree in advance is payable if one side breaches — often a daily rate for late performance or a one-off percentage. It is usually called a liquidated damages clause.
How is the penalty calculated?
Most often as a daily rate on the base amount: amount × daily rate × days late. For £20,000 at 0.1% a day over 30 days that is £600. A fixed clause is a single percentage of the amount instead.
Are penalty clauses enforceable in England?
A clause is enforceable only if it protects a legitimate interest and is not out of all proportion to it. A sum designed purely to punish the other side is an unenforceable penalty and the court will not award it.
Can the penalty exceed the contract value?
It can, unless the contract caps it — for example at the base amount. But a sum far larger than any realistic loss risks being struck down as a penalty rather than genuine liquidated damages.
Can I claim interest as well?
Often the liquidated damages clause is the agreed remedy for late payment. Where it is not, you may be able to add statutory or contractual interest on the overdue sum on top.
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