Late fee calculator for invoices.

How a late fee is calculated

A late fee is a share of the unpaid invoice, a flat amount, or both, added once or on a schedule after the due date, as your terms say. It's charged on the work itself, never on earlier fees.

A monthly percentage

Unpaid amount × monthly rate, once for every 30 days late

Yearly interest, by the day

Unpaid amount × yearly rate × days late ÷ 365

A flat fee

The fixed amount, once, a set number of days after the due date

Take a $2,400 invoice due September 18 on 1.5% a month, starting 5 days late. On October 28 it's 40 days overdue: $36 was added on September 23 and $36 more on October 23, $72 in late fees and $2,472 in all. That's about 18% a year. The same 18% counted by the day would be $2,400 × 18% × 40 ÷ 365 = $47.34.

What's a reasonable late fee?

Invoice late fees usually take one of three shapes: a monthly percentage, a flat fee, or a flat fee followed by a percentage. BillGrid's ready-made terms are 1.5% a month (about 18% a year) up to 10% of the invoice, or a flat $25 five days after the due date.

Make the fee large enough to be worth asking for and small enough to read as a fair price for waiting. Above 2% a month this calculator warns you: many US states cap interest lower, and a court can refuse a fee that looks like a penalty. If you quote a monthly rate, write the yearly rate beside it. In Canada that's the law, and it makes the cost plain to your client everywhere else.

Can I charge a late fee?

Yes, if your client agreed to it before the invoice was due, and it's reasonable. Put the terms in your contract or proposal and on every invoice. A clause you add now doesn't apply to a debt that already exists, so put it on your next invoices and the next late payer is covered.

Even without a clause, the law can give you interest. The UK, Ireland and the rest of the EU add interest and a fixed sum to any late business invoice. Some US states allow interest on a late debt when the contract names no rate, such as California's 10% a year after a breach (Civil Code §3289) and Texas's 6% from the 30th day (Finance Code §302.002). See late fees by country for each rate and its official source.

Where a freelance payment law applies, you can usually claim up to twice what's unpaid through a court or an agency. That's separate from any late fee you agreed.

Late fees by country

The UK, Ireland and the EU give you interest on a late business invoice by law; the US, Canada and Australia leave it to your terms. What counts is the law that governs the contract, not the currency of the invoice. Rates are for invoices that fell overdue from July to December 2026; consumer debts can follow different rules.

The UK's Commercial Payments Bill would cap payment terms at 60 days and stop contracts opting out of statutory interest; the EU's proposed Late Payment Regulation is still pending. We'll update this table if either becomes law.

How to ask a client for a late fee

Agree it up front, remind before the due date, and when a fee is added, name it, its date and the new total. A fee works best as a term your client knew about, not a surprise.

1. Put the terms on every invoice. Copy the invoice wording under the result into your contract and your invoice template.
2. Remind before it's due. A short note three days before and another on the due date. Use our payment reminder email templates.
3. When a fee is added, say so plainly. Print the statement above, which lists each fee and its date, or send a payment reminder letter.
4. Still unpaid? A final demand, then small claims. See what to do when a client won't pay.

On Pro and Team, BillGrid can print the terms on invoices, send reminders on schedule and hold each fee for your approval. How late fees work in BillGrid.

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