Late Fee Calculator

    Work out the late fee or interest on an overdue invoice, then copy the wording to put on your next one. Enter the amount, the dates, and your rate.

    Fee type
    Days overdue
    30
    Chargeable days
    30
    ★ Late fee
    $15.00
    New total
    $1,015.00

    Wording for your invoice

    Payments received after the due date incur a late fee of 1.5% per month on the outstanding balance, calculated daily.

    Interest is simple interest, pro-rated by day: monthly rates use a 30-day month and annual rates a 365-day year. A payment on or before the due date gives a fee of zero.

    How late fees work on invoices

    A late fee is a charge the client agreed to pay if they miss the due date. It comes in four common forms. See the late fee and late payment interest definitions for the short version.

    • Flat fee

      A fixed amount, such as $25, added once the invoice is late. Easy to explain and the right fit for small invoices, where a percentage would come to a few cents.

    • One-time percentage

      A single charge worked out as a share of the invoice, such as 5%. It scales with the invoice size, but a client who is two months late pays the same as one who is two days late.

    • Monthly interest

      A rate per month, such as 1.5%, charged for each day the balance stays unpaid. The longer the delay, the higher the fee, which keeps the pressure on long overdue invoices.

    • Annual interest (APR)

      A yearly rate pro-rated by day. Statutory late payment interest in the UK and EU works this way, so it is the format to use when you rely on those rules.

    Common late fee rates

    These are ranges small businesses typically use, not legal limits. The right rate is one your client agreed to in advance and that stays within the rules where you both operate.

    Fee typeTypical rangeFits
    Monthly interest1% to 2% per monthOngoing B2B work and larger invoices
    Flat fee$25 to $50Small invoices and one-off jobs
    One-time percentage1% to 5% of the invoiceMid-size invoices where you want one simple charge
    Grace period3 to 7 daysSoftening the fee for clients who pay a few days late

    Is it legal to charge a late fee?

    Usually, if the client agreed to it before you did the work. The limits depend on where you and your client are based. Figures below were checked in October 2026.

    United States

    Late fees and interest on business invoices are set by state law, and the caps differ from state to state. In New York, the general civil usury limit is 16% a year (General Obligations Law 5-501 with Banking Law 14-a). In California, the state constitution allows 7% a year on accounts after demand and sets separate limits for written contracts (California Constitution, Article XV). Put the fee in your contract and on the invoice, and check your state's rules before you charge it.

    United Kingdom

    Under the Late Payment of Commercial Debts (Interest) Act 1998, a business paid late by another business can claim statutory interest of 8% plus the Bank of England base rate (gov.uk). The base rate that counts is the one in force on 30 June or 31 December before the debt became late (SI 2002/1675). Bank Rate has been 3.75% since 18 December 2025 (Bank of England), so statutory interest on debts that became late in 2026 is 11.75% a year. Use the annual interest option above with that rate.

    You can also claim a fixed sum for recovery costs once per invoice: £40 on debts up to £999.99, £70 on £1,000 to £9,999.99, and £100 on £10,000 or more (gov.uk). Statutory interest does not apply if your contract already sets a different interest rate.

    European Union

    The Late Payment Directive (2011/7/EU) gives businesses paid late by other businesses or public authorities interest of at least 8 percentage points above the reference rate, which for euro countries is the European Central Bank's main refinancing rate. It also gives a fixed minimum of EUR 40 in recovery costs, due without a reminder. When the contract sets no payment date, interest starts 30 days after the client receives the invoice (Directive 2011/7/EU on EUR-Lex). Each member state writes the directive into its own law, so check the national rules too.

    South Africa

    When a debt bears interest and no law, agreement or trade custom sets the rate, the Prescribed Rate of Interest Act 55 of 1975 applies. The rate is the Reserve Bank's repurchase rate plus 3.5 percentage points, fixed at the time the interest starts to run (the Act, section 1). The Reserve Bank raised its policy rate to 7.25% from 25 September 2026 (SARB), which puts the prescribed rate at 10.75% a year from 1 November 2026. Before then it is 10.5%.

    This page is general information, not legal advice. Rules change and depend on your contract, so speak to a lawyer or accountant where you operate before you rely on a specific rate.

    Do late fees actually work?

    Sometimes. A late fee written into your terms tells clients the due date is real, and it gives you something to point to in a reminder. Many freelancers never collect the fee. They mention it in a follow-up, and that is often enough to move the invoice up the client's pile.

    A fee does little on its own when a client is short of cash or has forgotten. The late payment statistics point to reminders, online payment, and shorter terms as the things that shorten the wait. Pair the fee with a prompt reminder and an easy way to pay. Our overdue invoice email templates cover what to send and when.

    ★ Automated reminders

    Stop calculating late fees by hand

    On Pro and Business, SolidInvoice emails overdue customers automatically. Every invoice carries a pay link for card or PayPal, so the client can settle it from the reminder.

    Start Free Trial

    14-day free trial. Cancel anytime during your trial and you won't be charged.

    Compare plans

    Late fee FAQ

    How much should I charge for a late payment?

    Small businesses commonly charge 1% to 2% per month on the overdue balance, or a flat fee of $25 to $50. Pick a rate that covers the cost of waiting, agree it with the client before the work starts, and check that it stays under any legal limit where you and your client are based.

    How do I calculate a late fee on an invoice?

    Count the days between the due date and the payment date, then subtract any grace period. For monthly interest, multiply the balance by the monthly rate and by the days overdue divided by 30. For an annual rate, divide by 365 instead. A flat or one-time percentage fee does not depend on how late the payment is.

    Can I add a late fee that was not in my payment terms?

    A fee the client never agreed to is hard to collect. Put the late fee in your contract and on every invoice from now on, and send a firm reminder for the current invoice instead. In the UK and EU, businesses can claim statutory interest on late business-to-business payments even when the contract says nothing about it.

    What is the difference between a late fee and late payment interest?

    A late fee is usually a one-off charge, either a flat amount or a percentage of the invoice. Late payment interest builds up every day the invoice stays unpaid. Interest is fairer on long delays, while a flat fee is simpler to explain on small invoices.

    Should I put the late fee on the invoice?

    Yes. State the fee next to the due date in plain words, for example "Payments received after the due date incur a late fee of 1.5% per month on the outstanding balance." The calculator above writes this sentence for you from the rate you choose.

    Need the invoice too? The free invoice generator makes a PDF with your late fee in the terms. More on terms: invoice payment terms explained.