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Late Fee Calculator

Work out the late fee and interest on an overdue invoice — using a custom rate, UK statutory interest, or typical US guidance.

Invoice Details

Late fees start counting only after this many days past the due date.

Fee Method

Simple interest, pro-rated by the days overdue.

Result

Enter the invoice amount and due date to calculate the late fee.

Estimates only, not legal or financial advice. Late-fee and interest rules vary by country, state, and contract — confirm what applies before billing a client.

How Late Fees Are Calculated

A late fee is a charge added to an invoice once it passes its due date. The point is to compensate you for the delay and to give clients a reason to pay on time. Most late fees are calculated as simple interest, pro-rated over the exact number of days an invoice is overdue, so the amount grows the longer payment is outstanding. The calculator above supports three common methods.

1. Custom rate

Set your own rate as a percentage per month, a percentage per year, or a one-off flat fee. Percentage rates are treated as simple interest and pro-rated by the days overdue: a monthly rate is scaled by days ÷ 30 and an annual rate by days ÷ 365. A flat fee is a single fixed charge that applies once the invoice is late. This is the most flexible option and matches whatever wording you put on your own invoices.

2. UK statutory interest (B2B)

For overdue business-to-business invoices in the UK, the Late Payment of Commercial Debts (Interest) Act lets you charge the Bank of England base rate plus 8%, as simple interest pro-rated daily. On top of that you can claim a fixed compensation charge — £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. The base rate is an editable input because it changes periodically; confirm the current figure before you rely on it.

3. US guidance

There is no single national late-fee rate in the US. In practice, businesses commonly charge 1% to 2% per month (about 12% to 24% a year), with 1.5% per month being the most typical. Some states cap commercial interest while others let written commercial contracts set their own rate, so the reference table in the calculator lists commonly cited limits only — always verify what applies where you operate. Whatever rate you choose, it is only enforceable if it was disclosed in writing before the work was done.

Not legal advice. This page and calculator are for general information only. Late-fee and interest rules vary by country, state, and contract, and they change over time. Confirm the current law and your own terms — or speak to a qualified professional — before charging a client.

Frequently Asked Questions

Can I legally charge a late fee on an invoice?
In most cases yes, provided the late fee was agreed in advance. The safest way to make a late fee enforceable is to state it in writing on the original invoice or in your contract before the work is done — for example, '1.5% interest per month on overdue balances.' If the client never agreed to a fee, charging one after the fact is much harder to enforce. Some jurisdictions also cap how much you can charge, so keep the rate reasonable.
How much late fee can I charge on an invoice?
A common, widely accepted rate is 1% to 2% per month (roughly 12% to 24% a year), with 1.5% per month being the most frequently used. Limits vary by country, state, and whether the customer is a business or a consumer — some US states cap commercial interest while others let written commercial contracts set their own rate, and the UK sets a statutory rate for B2B debts. Stay within your local limit and keep the fee proportionate to the amount owed.
Do I need late-fee wording on the original invoice?
Yes — this is the single most important step. A late fee is far easier to enforce when the invoice (and ideally the contract) stated it before payment was due. Add a clear line such as 'Payment due within 30 days. A late fee of 1.5% per month applies to overdue balances.' Setting explicit payment terms up front also gives you a clean due date to measure the overdue period from — you can work that out with our payment terms calculator.
How is interest on an overdue invoice calculated?
Most late fees use simple interest pro-rated over the number of days the invoice is overdue. Take the outstanding amount, apply the periodic rate, and scale it by the days late: for a monthly rate, fee = amount × (monthly rate) × (days overdue ÷ 30); for an annual rate, fee = amount × (annual rate) × (days overdue ÷ 365). A flat fee, by contrast, is a single fixed charge that applies once the invoice becomes overdue. The calculator above does this math for you.
How does UK statutory interest on late payments work?
Under the Late Payment of Commercial Debts (Interest) Act, businesses can charge statutory interest on overdue B2B invoices at the Bank of England base rate plus 8%, calculated as simple interest pro-rated daily. On top of the interest you can also claim a fixed compensation charge based on the size of the debt: £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. Because the base rate changes periodically, always confirm the current rate before you invoice.
Should I actually charge my client a late fee?
It depends on the relationship. A late fee is a useful deterrent and signals that your payment terms are firm, but enforcing one on an otherwise good client can strain the relationship. Many businesses treat the fee as leverage: they mention it in a polite reminder before applying it, and often waive it once payment arrives. A friendly nudge frequently works better than an immediate charge — see our guide on chasing unpaid invoices.
Does a grace period change the late fee?
Yes. A grace period delays when the fee starts. If you allow, say, five grace days, the overdue clock only begins five days after the due date, so a payment that arrives within that window owes no fee. The calculator lets you set a grace period so the days-overdue figure — and therefore the fee — reflect your actual policy.

Making a Late Fee Stick

The best late fee is the one you never have to charge. It works as a deterrent only when clients know about it in advance, so put the terms on the invoice itself — a due date and a line like “a late fee of 1.5% per month applies to overdue balances.” If you are not sure what due date to set, the payment terms calculator turns terms like Net 30 into an exact date you can measure the overdue period from.

When an invoice does go overdue, a calm reminder usually beats an immediate charge. Our guide on how to charge late fees on invoices covers the exact wording to use, and chasing unpaid invoices walks through a polite escalation sequence. Once you have the figure, you can add it straight to an invoice as a separate line item, or explore the full set of invoice tools.

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