Late fee calculator
Enter the invoice amount, your interest rate, and how many days it's overdue. See the late fee and total owed instantly.
Simple interest, prorated daily over a 365-day year. Estimate only — the late fee or interest you can legally charge depends on your contract and local law. Not legal advice.
A late fee works best as a prompt, not a punishment
The point of a late fee is rarely the extra few dollars. It's the signal — that you track your invoices, that terms mean something, and that paying late has a (small) consequence. A fee stated clearly in your terms gives your reminders quiet authority.
That's also why many businesses calculate the fee, mention it in the reminder, and then waive it the moment the client pays. The reminder did its job. If you want the follow-up to happen on its own — fee mentioned, sequence escalating, stopping the instant you are paid — that is exactly what PayNudge automates.
Questions about late fees
How do you calculate a late fee on an invoice?
The most common method is simple interest: multiply the unpaid amount by the annual interest rate, then by the fraction of the year it's overdue (days overdue ÷ 365). Many businesses also add a flat late fee. This calculator does both for you.
What is a reasonable late fee to charge?
A common range is a flat fee of around 1–2% of the invoice, or annual interest of 8–18%, but what you can charge depends on your contract and local law. The fee must usually be stated in your terms before the invoice goes out to be enforceable.
Can I legally charge interest on an overdue invoice?
In most places you can, provided your contract or invoice terms specify the late fee or interest rate in advance, and the rate stays within legal limits. Rules vary by country and state — this tool is an estimate, not legal advice.
Should I actually charge clients a late fee?
A stated late fee is most useful as a deterrent and a prompt — it gives your reminders teeth. Many businesses calculate it, mention it in the reminder, but waive it once the client pays promptly. A gentle reminder sequence often gets the invoice paid before the fee matters.