Work out what a client owes you for paying late.
Fixed fee, percentage or daily and monthly interest on an overdue invoice, with a grace period, the days actually late, the total now due and what it works out to as an annual rate.
Invoice amount ($)
Grace period (days)
Due date
Paid date (or today)
Late fee percent (%)
Quick examples
Your late fee estimate
Total due - $1,000 invoice + $15 fee
Fee = $1,000 x 1.5% = $15. Total = $1,000 + $15 = $1,015. Days late = Paid Dec 31 - Due Dec 1 - Grace 10 = 20 days. Effective APR = Fee / Invoice x 365 / Days Late x 100 = 27.38%
Late fee letter template (unique)
Dear Client, Your invoice #INV-1000 for $1,000 was due on Dec 1, 2024. As of Dec 31, 2024 it is 20 days late after 10 days grace. A late fee of $15.00 applies. Total due now $1,015.00. Please pay promptly to avoid additional fees. Thank you.
The same panel you used above, working out a $1,000 invoice paid 30 days late with a 10 day grace period: the days that actually count, the fee under your terms and the total now due.
What the client now owes
$0.00
Invoice plus late fee
Fee = invoice × rate, over the days that count
If they pay later still
Start with the amount you need to borrow
Jump to any part to replay it. The formulas behind these numbers are set out further down the page.
The fee is the last step, not the first. These are the four things that decide whether you can charge it, and whether charging it costs you the client.
A fee that first appears on an overdue reminder is easy to refuse. Put it on the quote and on every invoice as one plain sentence, so by the time it applies it is a term the client already accepted.
The invoice generator carries your terms and late fee on every invoice by default.
Five to fifteen days covers the client whose payment run is weekly and costs you almost nothing. It also makes the fee much harder to argue with when it does apply, because you visibly allowed for the ordinary delays first.
Set the grace period above and the calculator counts only the days that actually count.
A $25 fee on a $1,000 invoice paid 30 days late annualises at around 30 percent, which sounds aggressive until you compare it with what the delay costs you. The effective APR above is there so you can set a rate that is defensible rather than arbitrary.
If cash flow is the real problem, a deposit on the quote prevents it better than any fee collects it.
Many businesses calculate the fee, state it on the reminder, then waive it once payment arrives. That is a reasonable policy and far better than having no fee at all: the number on the page is what moves an invoice up someone else's payment run.
What does not work is charging it inconsistently, which reads as arbitrary rather than firm.
Charging for late payment is what you do when the earlier steps did not work. The two documents before it are free here as well, and they prevent far more late payment than any fee recovers.
A quote with a deposit, a due date and the late fee written into it. A client who accepted the term rarely disputes the charge.
Open the Quote GeneratorEvery day between finishing and invoicing is a day added to the wait. Send it with the due date and the fee visible on the page.
Open the Invoice GeneratorDays late, the fee under your terms and the total now due, with the effective APR so you can see whether the rate is fair.
You are hereWondering whether the wait is costing more than the job earned? The profit margin calculator puts a number on it.
Calculating late fees in Excel can lead to missing grace period, miscalculating days late, and mixing up daily vs monthly interest. Our calculator prevents that and shows true total due instantly with letter template.
Grace period and days late clarity
Enter due date, paid date, grace period. We calculate days late after grace. An invoice due on 1 December and paid on the 31st, with a 10 day grace period, is 20 days late, not 30. Off-by-one errors on that count are the usual reason a fee gets disputed.
All fee types in one place
Fixed fee $25 flat, percent fee 1.5% monthly, daily interest APR 10% daily = APR/365 per day, monthly interest 1.5% per month, combo fixed + percent + interest. See effective APR for each.
Unique - Letter template and state caps
Auto generates late fee notice letter with invoice amount, due date, days late, fee, total due. Plus state caps table shows typical late fee limits by state to stay legal.
Mobile first and client side
Works on iPhone, Android, desktop, no app install, calculations in browser, no data stored. For freelancers, contractors, small business, landlords, SaaS.
Choosing right late fee depends on invoice size, industry, and how you want to motivate on time payment. Here are three proven models we see used by freelancers, agencies, landlords, and B2B companies.
Charge percent of unpaid balance per month or per year. Easy to scale with invoice size. Typical: 1 percent per month conservative and widely accepted, 1 to 1.5 percent per month 12 to 18 percent annual standard for B2B invoices, 2 percent per month higher end that can hit legal limits in some states. Example $5,000 invoice at 1.5 percent per month 30 days late equals $75 fee. Best when invoices vary a lot.
Fixed dollar amount no matter invoice size. Simple to explain and calculate. Typical: $25 to $50 for smaller invoices under $1,000, $50 to $100 for mid size invoices, or 5 percent of invoice as flat one time fee. Example $25 flat fee on any invoice over 30 days late. Works well when most invoices are similar size and you want admin cost covered.
Flat fee upfront to cover admin plus ongoing percent for extended delay. Covers your time chasing payment plus time value of money. Example $25 flat fee plus 1 percent per month ongoing. So $1,000 invoice 60 days late equals $25 plus $20 equals $45 total fee. Our calculator combo mode does this math automatically.
Tip: For small invoices under $500 flat fee feels more meaningful. For large invoices over $5,000 percentage creates stronger incentive. Many businesses use both minimum $25 or 1.5 percent whichever greater.
Rules vary by state and B2B vs consumer. Must be reasonable, disclosed in contract before work, and within usury caps 10 to 25 percent typical. Without prior agreement fees may not be enforceable.
Typical State Caps - Verify Current Law
California 10 percent annually unless contracted otherwise, New York 16 percent annually criminal above 25 percent, Texas 18 percent annually or 6 percent above Fed rate, Florida 18 percent annually higher needs disclosure. B2B often higher if in written contract, consumer stricter. Consult lawyer. Source State usury statutes.
Each mini calculator works with custom values and links to full calculator above.
Total due: $1,050 | Fee: $50
Fee: $15 | Total: $1,015 | APR if 30 days late: 18.25%
Interest: $8.22 | Total: $1,008.22 | Daily rate: 0.0274%
Effective APR: 30.42% APR | Fee $25 on $1,000 30 days late equals 30.42% annualized
| Fee Type | Example | Fee | Total Due | Effective APR 30 Days |
|---|
| State | Typical Cap | Notes |
|---|
Enter invoice amount $1,000, due date Dec 1, paid date Dec 31. Calculator computes calendar days late 30 days minus grace 10 days equals 20 days late after grace. Supports overdue invoices and today as paid date.
Enter grace period 10 days typical 5 to 15 days. Fee only applies after grace. Example due Jan 1 grace 10 days fee starts Jan 12. Shows days late before and after grace.
Fixed fee $25 to $50 flat, percent fee 1.5% monthly typical 5 to 10% one time, daily interest APR divided by 365 times days late, monthly interest monthly percent times months late, combo fixed plus percent plus interest for full business use.
Fixed and percent are one time fees. Daily and monthly interest accrue over time. Example $1,000 at 10% APR daily 30 days $8.22 interest, 60 days $16.44. Simple interest not compound unless you enable combo.
See invoice amount, days late after grace, late fee, interest, total due, effective APR annualized, cost breakdown bar invoice 98.5% fee 1.5%, letter template auto generated.
Writes the reminder letter for you from the figures above, and lists the typical state limits beside it so the rate you choose is one you can defend. Works on a phone, entirely in the browser.
Input invoice amount $1,000, due date Dec 1 2024, paid date Dec 31 2024 or today. Calculator shows calendar days 30 days total.
Input grace period 10 days typical. Days late after grace = calendar days minus grace. Example 30 minus 10 = 20 days late after grace. If negative, no fee.
Choose percent 1.5% monthly typical, fixed $25 flat, daily interest APR 10% divided by 365 per day, monthly interest 1.5% per month, combo $25 fixed plus 1.5% plus 10% APR daily.
Check the days that actually count once the grace period is applied, then the fee, the total now due, and what the charge works out to as an annual rate. Example $1,000 $15 fee 20 days late effective APR = 15 / 1000 x 365 / 20 x 100 = 27.38% APR.
Copy results or use auto generated late fee notice letter to send to client. Export to CSV for accounting. Check state caps table to stay legal.
Invoices are due within 14 or 30 days of invoice date. Invoices not paid within 7 days of due date will incur late fee of 1.5 percent per month on outstanding balance or $25 minimum whichever greater. Customize days and percent for your state.
Invoice $1,000 | Due Dec 1 | Paid Dec 31 | Grace 10 days | Days late after grace 20 days | Fee type 1.5% monthly | Fee $15 | Total $1,015 | Effective APR 27.38%
Typical for freelancers and consultants.
Invoice $500 | Due Jan 1 | Paid Jan 20 | Grace 5 days | Days late 14 days | Fee type $50 fixed | Fee $50 | Total $550 | Effective APR 260.71%
Fixed fees high APR for small invoices - use percent for fairness.
Invoice $2,000 rent | Due Jan 1 | Paid Jan 15 | Grace 5 days | Days late 9 days | Fee type 5% percent | Fee $100 | Total $2,100 | Effective APR 202.78%
Many states cap rent late fee 5% to 10% max.
Invoice $1,000 | Due Dec 1 | Paid Jan 30 | Grace 0 days | Days late 60 days | Fee type 10% APR daily | Interest $16.44 | Total $1,016.44 | Effective APR 10%
Daily interest fair for ongoing subscription late payment.
Fixed fee = flat amount if days late after grace > 0. Example $25 fixed fee if late. Total = invoice + fixed fee. Simple one time.
Percent fee = invoice amount times percent. Example $1,000 times 1.5% = $15. Total = invoice + fee. One time or per month if monthly type.
Daily interest = invoice times APR divided by 365 times days late after grace. Example $1,000 at 10% APR 30 days late interest = 1000 x 0.10 / 365 x 30 = $8.22. Total = invoice + interest.
Monthly interest = invoice times monthly rate times months late. Months late = days late after grace divided by 30.44. Example $1,000 1.5% monthly 20 days late months 0.657 fee $9.86.
Effective APR = fee divided by invoice times 365 divided by days late after grace times 100. Example $25 fee $1,000 invoice 30 days late APR = 25 / 1000 x 365 / 30 x 100 = 30.42% APR. Shows true annualized cost of late fee.
Combo = fixed fee + percent fee + daily interest. Example $1,000 invoice $25 fixed + 1.5% $15 + 10% APR daily 20 days $5.48 = $45.48 total fee total due $1,045.48. For businesses charging both flat and interest.
All calculators are part of InvoiceTools free suite for invoicing, pricing, taxes, and business finance. Google indexes them as one toolkit.
If you are checking late fee, you probably also need these for invoicing and business. Same browser side no sign up.
Days late = paid date minus due date. Days late after grace = max 0, days late minus grace period. Fixed fee = flat amount if days late after grace > 0 else 0. Percent fee = invoice amount times percent divided by 100. Daily interest = invoice amount times APR divided by 100 divided by 365 times days late after grace. Monthly interest = invoice amount times monthly percent divided by 100 times days late after grace divided by 30.44. Combo fee = fixed fee plus percent fee plus daily interest. Total due = invoice amount plus fee plus interest. Effective APR = fee plus interest divided by invoice amount annualised over the days actually late, so a flat fee can be compared with an interest rate. The reminder letter fills in from your inputs. State caps table for reference only not legal advice. No storage no API, calculations in browser. Disclaimer estimates for informational purposes only.
Common questions about late fee, daily interest, monthly interest, grace period.
Whichever way your terms are written. A flat fee is a single amount, typically $25 to $50. A percentage fee is the invoice times the rate, so 2% of $1,000 is $20. Interest accrues per day or per month on the outstanding balance, which is the fairer method when an invoice runs months late rather than days.
The most common terms are 1.5% a month, which is 18% a year, or a flat $25 to $50 on smaller invoices. What matters more than the number is that it was stated on the invoice before the work was done.
Take the annual rate, divide by 365, and multiply by the invoice and the days late. On $1,000 at 10% APR, that is 27 cents a day, so 30 days late costs $8.22. Daily interest is the method that scales sensibly whether payment is a week or a year overdue.
Whatever your grace period says, usually 5 to 15 days after the due date. A short grace period is worth having: it covers the client whose payment run is weekly, and it makes the fee harder to argue with when it does apply.
Generally yes, where the fee was agreed in advance and is reasonable rather than punitive. Several states cap the rate, and some cap it separately for rent. Treat this as the general position rather than legal advice, and check your own state before setting a rate.
Invoice, plus the fee, plus any interest accrued to today. The calculator shows the total as one figure so you can put a single number on the reminder rather than asking the client to add it up themselves.
It is the annualised cost of whatever you charged, which makes a flat fee comparable to an interest rate. The same flat $25 on a $1,000 invoice, 30 days late, works out at about 30% a year, which is usually higher than people assume when they set a flat fee.
It is risky. A charge nobody agreed to in advance is easy for a client to refuse and awkward to pursue. State the fee on the quote and on every invoice, so it is a term rather than a surprise.
A flat fee suits small invoices where a percentage would be trivial. Interest suits large ones, or clients who pay months rather than days late, because it keeps growing while the money is outstanding. Some businesses use both.
Often yes, where your terms say so: a flat administration fee once, then interest while the balance is unpaid. Set it out in one sentence on the invoice, because a client who cannot follow the arithmetic tends to ignore the whole line.
Multiply the invoice by 0.015 for each month it is late, and pro-rate part months. On $1,000 that is $15 a month, or 50 cents a day, which is the figure to quote when a client asks what waiting is costing them.
Whatever you can defend as reflecting the cost of being kept waiting, agreed before the work rather than after. In practice that means a rate in line with commercial norms, applied consistently, and stated on the paperwork the client accepted.
Whatever your grace period says, and 5 to 15 days is normal. Charging on day one reads as aggressive; charging after a stated grace period reads as a term being applied.
Generally yes, where the rate was agreed and is not punitive, though several states cap it and some cap rent separately. Check your own state before setting a rate, and treat this as the general position rather than legal advice.
A late fee is charged once, an administration charge for the trouble. Interest accrues while the money is outstanding. Many terms use both: a flat fee at the start, interest thereafter.
Divide the fee by the invoice, multiply by 365 over the days late, then by 100. A $25 fee on $1,000 paid 30 days late annualises near 30%, which is worth knowing before you set the number.
Always. A polite reminder a few days after the due date collects more invoices than a fee ever will, and it makes the fee defensible if you do apply it later.
Point at the term as written on the quote and the invoice. If it was not written down, drop it, add the term for next time, and consider a deposit for that client.
Usually the fee is calculated on the total amount outstanding, tax included, because that is the money you are owed. Say which basis you use in your terms so it cannot be argued.
Invoice the day the work is finished, put an explicit due date rather than a phrase, ask for a deposit on larger jobs, and make paying easy. Those four do more than any fee.
One sentence is enough: payment due within 30 days, after which interest accrues at 1.5% a month on the outstanding balance. Put the same sentence on the quote, so the client agrees to it before the work rather than after it.
Often yes, and it still worked. Calculating the fee and stating it on the reminder is what moves your invoice up someone else's payment run; waiving it once the money lands costs you nothing and keeps the relationship.
Check what your invoice and quote actually said. If the fee was stated in advance, hold the line politely and in writing. If it was not, treat it as a lesson, add the term going forward, and consider asking for a deposit next time.
Stated fees help more than charged ones. What reduces late payment most is a clear due date, a fee in the terms, and an invoice sent the day the work finished.
Part of InvoiceTools.com - Free Invoice Generator, Late Fee Calculator, Profit Margin Calculator, Loan Calculator, Salary Calculator, Sales Tax Calculator. Built for freelancers, small business, agencies who invoice clients. No sign up, client side only, indexed as invoicing toolkit.