Step 1
Enter the invoice amount and due date
Start with the original invoice total and the date payment was due. The calculator uses today's date to determine how many days overdue the invoice is.
Free Finance Tool
Free Late Payment Fee Calculator
A late payment fee is a charge added to an overdue invoice to compensate for delayed payment, typically a flat fee or a monthly percentage on the unpaid balance. Use this free calculator to figure out exactly how much to charge a client and to generate a ready-to-use contract clause.
Flat, simple, or compound modelsLive calculationCopy-paste contract clause
Built for
Freelancers chasing late client payments
Agencies enforcing invoice terms
Consultants drafting payment clauses
Late fee
$37.50
Updates live as you adjust the invoice, due date, grace period, and fee model below.
How To
How to use this calculator
Enter your invoice details, pick a fee model, and copy the contract clause that backs it up.
Step 2
Set your grace period
Add any grace period you offer before late fees start accruing. A common grace period is 5 to 10 days. Days overdue are counted only after the grace period ends.
Step 3
Choose a late fee model
Pick a flat fee (a single dollar amount), simple percentage interest per month, or compound interest per month. 1.5% per month is the most common rate.
Step 4
Copy the contract clause
The calculator outputs a ready-to-use late payment clause that matches your settings. Paste it into your contract or invoice template to make the fee enforceable.
Calculator
Calculate the late fee
Most US states cap interest at around 1.5% per month (18% APR) for commercial transactions, though limits vary. Always check your local jurisdiction. This tool provides general information and is not legal advice.
Result breakdown
Days overdue
30
Late fee
$37.50
New invoice total
$2,537.50
Per-day accrual
$1.25
Late fee clause
Late Payment. Invoices are due upon receipt unless otherwise stated. Any invoice that remains unpaid past the due date shall accrue simple interest at a rate of 1.5% per month (18.00% per year), calculated daily on the unpaid balance. Client agrees to pay all reasonable collection costs, including attorney's fees, incurred to collect any overdue amount.
Reference
Late fee rates by US state (general guidance)
Interest and late fee rules vary widely by state and by the type of contract. Always check your jurisdiction and consult an attorney before relying on these limits. This is general information, not legal advice.
| State | General interest cap |
|---|---|
| California | 10% per year for non-business loans; commercial agreements freely negotiated |
| New York | 16% per year general usury cap; commercial loans over $250k exempt |
| Texas | 18% per year for most commercial transactions |
| Florida | 18% per year on most consumer transactions |
| Illinois | 9% default; up to amount agreed in writing for business contracts |
| Massachusetts | Up to 20% per year without a special license |
| Washington | 12% or 4% above federal reserve rate, whichever is higher |
FAQ
Frequently asked questions
How much late fee can I charge a client for an overdue invoice?
A common, widely accepted late fee is 1.5% of the unpaid balance per month (18% APR), which is the maximum allowed in many US states. Some freelancers and agencies charge a flat fee of $25 to $50 plus monthly interest. The fee must be agreed to in your contract or invoice terms, and it must comply with the usury or interest cap laws of your jurisdiction.
Is a 1.5% per month late fee legal?
In most US states, 1.5% per month (18% annualized) is legal for commercial transactions, but exact caps vary by state and by the type of client (business vs. consumer). Some states cap interest lower, others allow higher. Always check your jurisdiction and your written contract terms. This calculator provides general guidance and is not legal advice.
How do I calculate late fees on an invoice?
First, determine how many days the invoice is overdue beyond any grace period. For a flat fee, you simply add a fixed amount once the grace period passes. For percentage interest, multiply the invoice amount by the monthly rate, divide by 30, and multiply by the number of overdue days. Compound interest applies the monthly rate at the end of each completed 30-day period.
What should a late payment clause say in a contract?
A late payment clause should state the due date for payment, any grace period, the late fee model (flat or percentage), the rate, and the date interest begins to accrue. It should also note that the client is responsible for collection costs if the invoice goes unpaid. This calculator generates a copy-paste clause that reflects the model and rate you selected.
Can I charge interest on overdue invoices as a freelancer?
Yes, freelancers can charge interest on overdue invoices, but only if the right to charge interest is stated in your contract or accepted invoice terms before work begins. Without that written agreement, collecting late fees becomes much harder. Add a late payment clause to every contract and invoice to protect yourself.
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