Invoice Late Fee Calculator
Example: Invoice balance: 2500 $ · Monthly late-fee rate: 1.5 % · Days past due: 45 days
| Late fee owed | $56 |
| New total due | $2,556 |
| Annualized rate | 18.00% |
Worked example
A $2,500 invoice at a 1.5% monthly late-fee rate that is 45 days past due is 1.5 months late. The fee is $2,500 x 0.015 x 1.5 = $56.25, making the new total due $2,556.25. That 1.5% monthly rate annualizes to 18%, a common and generally enforceable ceiling, though the maximum allowed varies by state.
Frequently asked questions
How much can I charge in late fees?
Late fees must be reasonable and are capped by state usury laws. A monthly rate of 1 to 1.5%, which annualizes to 12 to 18%, is common and widely accepted. Check your state's maximum before setting a higher rate.
Do I need late fees in my contract?
Yes. To be enforceable, your late-fee policy should be stated in the contract or on the invoice before the work, including the rate and when it applies. A fee sprung after the fact is hard to collect.
Should the fee compound?
This calculator applies a simple monthly rate prorated by days, which is the most common and defensible approach. Compounding late fees can run into legal limits and tends to antagonize clients you still want to keep.
When should I start charging?
Typically after a grace period past the due date, often net-15 or net-30 terms plus a few days. Sending a reminder before the fee kicks in usually recovers payment without souring the relationship.