Late Fee Calculator
Work out the late fee and total owed on an overdue invoice using an annual interest rate or a flat fee.
Overdue invoice
Result
Late fee
$6.58
Total now owed
$1,006.58
A 8% annual rate on $1,000.00 over 30 days works out to $6.58 in interest ($1,000.00 × 8% ÷ 365 × 30). Total now owed: $1,006.58.
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This free late fee calculator estimates the penalty on an invoice that has not been paid by its due date, plus the new total your client owes. Charge interest that accrues by the day, or a fixed flat fee — whichever your payment terms specify.
How the interest method works. A daily interest late fee is calculated as the invoice amount, multiplied by the annual interest rate, divided by 365 to get a daily rate, then multiplied by the number of days the invoice is overdue. Because it accrues per day, the fee keeps growing until the balance is paid, which is why interest-based terms are a strong incentive to pay on time.
How the flat fee method works. A flat late fee adds a single fixed charge the moment an invoice becomes overdue — for example $25 or $50 — regardless of how late the payment is. Flat fees are simple to communicate and easy for clients to understand.
Whichever you choose, spell out the late fee in your payment terms and contract before you start work so it is enforceable and never a surprise. This tool provides estimates only and is not legal or financial advice; late fee limits vary by state and country, so confirm the maximum rate allowed where you operate.
Frequently asked questions
How is a late fee on an invoice calculated?
With an interest rate, the fee is the invoice amount multiplied by the annual rate, divided by 365, multiplied by the number of days overdue. For example, 8% a year on a $1,000 invoice that is 30 days late is 1,000 × 8% ÷ 365 × 30 = $6.58. A flat late fee is simply a fixed one-time charge added to the balance.
What is a reasonable late fee to charge?
Common practice is a monthly finance charge of 1% to 1.5% (roughly 12% to 18% per year) or a flat fee such as $25 to $50. Whatever you choose, state it clearly on the invoice and in your contract before work begins, and make sure it complies with the maximum interest allowed in your state or country.
Can I legally charge a late fee?
In most places you can charge a late fee if it was agreed in advance — usually through your payment terms or a signed contract. Many regions also cap the maximum interest rate. This tool is for estimating charges only and is not legal or financial advice, so check the rules that apply to you.
Do I have to charge a late fee?
No. A late fee is optional and is mainly a deterrent that encourages clients to pay on time. Some businesses waive it for good clients or send a reminder first, then apply the fee only if the invoice stays unpaid.