The short version
A late fee is a contract term, not a right. Agree it in writing before the work, keep it proportionate, and put it on every quote and invoice. Do that and it rarely gets argued with. Add it after an invoice is already late and you are asking for a term the client never accepted.
Rule one: it has to be agreed before the work
The fee has to exist in something the client accepted: a quote they approved, a signed contract, terms attached to a purchase order. The moment it first appears on the overdue invoice, it is a new term proposed after the fact, and a client who disputes it usually wins. This is the single most common reason a late fee gets dropped, and it costs nothing to avoid: one line on the quote.
The wording does not need to be legal. Something like: invoices are due 30 days from the invoice date, and overdue amounts carry interest at 1.5% a month.
Rule two: reasonable, not punishing
A charge meant to compensate you for waiting is defensible. A charge meant to punish is where courts lose patience, and a rate far above what anyone in your trade uses invites exactly that argument. In US trade the common figure is 1.5% a month, which is 18% a year, usually after a grace period of about a week. Some use 1% a month, some add a fixed recovery charge for the chasing itself.
Compounding is where reasonable becomes hard to argue. Simple interest on the overdue amount is easier to defend and easier to explain to a client who queries it.
Rule three: your state sits behind the agreement
Every state sets its own statutory interest rate, which is what applies through the courts when the parties agreed nothing, and its own usury ceiling, which caps what can be charged even when both sides did agree. Two examples, both from the primary sources rather than a summary of them:
New York. CPLR 5004 sets interest at nine per centum per annum, except where another statute provides otherwise. Since a 2021 amendment, actions arising out of a consumer debt where the defendant is a natural person carry 2% instead. Business to business work sits at the 9% figure.
California. Article XV, section 1 of the state constitution sets 7% a year on money, goods or things in action, and on accounts after demand, where the parties did not contract in writing for a rate. Where they did agree in writing, the ceilings in that same section apply.
These two are here because they are properly sourced and they show how differently two large states treat the same question. A full fifty state table is deliberately not on this page yet, for the reason in the next section.
State rates, read from the statutes
These are the states done so far. Each rate below was read in the statute itself, not copied from another table, and the section is named so you can check it. This is the rate that applies when the parties agreed nothing about interest; a rate you agreed in writing before the work usually governs instead, up to that state's ceiling.
| State | Rate where nothing was agreed | Where it comes from | What it actually means |
|---|
| California | 7% a year | Constitution, Article XV, section 1 | Applies where the parties did not contract in writing for a rate. Where they did agree in writing, the ceilings in the same section apply. |
| Florida | Set quarterly | Statute 55.03, applied by 687.01 | Florida does not fix a number. The Chief Financial Officer sets the rate each quarter and 687.01 applies it where a contract specifies none, so check the current quarter rather than a table. |
| Georgia | 7% a year | OCGA 7-4-2 | Seven percent simple interest where the rate is not set by written contract. Written contracts may agree more, with ceilings that depend on the amount. |
| Illinois | 5% a year | 815 ILCS 205/1, with 205/4 | 5% is the rate on money due where nothing else was agreed. Written contracts may stipulate up to 9%. Judgments run at 9% under 735 ILCS 5/2-1303. |
| New York | 9% a year | CPLR 5004 | Nine per centum except where another statute provides otherwise. Since the 2021 amendment, consumer debt against a natural person runs at 2%. |
| Ohio | Set annually | Revised Code 1343.03, rate under 5703.47 | Ohio does not fix a number either. The rate is determined each year under 5703.47 and applies unless a written contract states a different one, so check the current year. |
| Pennsylvania | 6% a year | 41 P.S. 202, with 201 | Six per cent where a document says interest without naming a rate. Section 201 caps agreed interest at 6% on amounts of $50,000 or less, with exceptions above that. |
| Texas | 6% a year | Finance Code 302.002 | Starts on the 30th day after the amount is due, not the due date. The general ceiling for agreed interest is 10% under 302.001. |
Eight states, not fifty, and that is deliberate. Publishing a number beside a state name means asserting the statute, its current rate and which transactions it covers. Most tables you will find are copies of other tables, which is how a rate that changed years ago keeps circulating. Florida and Ohio are the clearest examples: neither has a fixed number to copy, because Florida resets its rate every quarter and Ohio every year. More states are added here as they are read, and none goes up before it is.
Putting it on your documents
Set the terms on the quote, repeat them on the invoice, and work out the number when a payment actually slips. The late fee calculator does the arithmetic and writes the reminder for you, the invoice generator carries the terms onto the document itself, and the payment terms guide covers which terms get invoices paid in the first place. If you want the scale of the problem, the late payment statistics page has the sourced numbers.
Sources
Every rate above was read in the statute text on an official or primary source: California Article XV section 1 on California Legislative Information; Georgia OCGA 7-4-2 in the Georgia Code; Illinois 815 ILCS 205 on the Illinois General Assembly site; New York CPLR 5004 on the New York State Senate site; Ohio Revised Code 1343.03 on the Ohio Laws site, with the annual rate set under 5703.47; Pennsylvania 41 P.S. 201 and 202; Texas Finance Code 302.002 on the Texas Constitution and Statutes site; Florida 55.03 and 687.01 with the current quarter rate published by the Florida Chief Financial Officer. All checked on 29 August 2026. This page is general information about how late fees usually work and is not legal advice; for a specific dispute, ask someone qualified in your state.