Invoice Late Fee Calculator
Calculate the late fee owed on an overdue invoice based on your stated annual interest rate and days past due.
How prorated late fees are calculated
This calculator prorates an annual interest rate down to the actual number of days an invoice is overdue — the invoice amount is multiplied by the annual rate, then scaled by the fraction of the year that has passed (days late divided by 365). This means the fee grows proportionally the longer payment is delayed.
Common late fee rates cited in business contexts range from around 1-1.5% per month (roughly 12-18% annualized), though the actual rate charged should always match what's specified in your invoice terms or contract — charging a rate not previously agreed to can create disputes or, in some jurisdictions, legal issues.
Setting late fee terms that hold up
For a late fee to be enforceable, it generally needs to be clearly stated in your invoice or contract terms before the work begins — surprising a client with a late fee they were never informed about is both a poor business practice and often unenforceable.
Some jurisdictions cap the maximum interest rate that can be charged on overdue invoices (usury laws), so it's worth confirming your stated rate is compliant with local regulations, especially for cross-border invoicing.
Frequently asked questions
What late fee rate is standard for invoices?
Common rates cited in business practice range from roughly 1-1.5% per month (about 12-18% annualized), though the applicable rate should match what's specified in your invoice terms or service agreement.
Can I charge a late fee that wasn't mentioned upfront?
Generally, a late fee needs to be clearly disclosed in your invoice or contract terms in advance to be enforceable and to avoid disputes — check applicable regulations in your jurisdiction for specifics.