The Invoice Late Fee Calculator works out what a late-paying customer owes on top of an invoice, using the fee structure in your terms: a percentage charged per day, week, month, or year, simple or compound, or a flat fee that may repeat monthly. Enter the invoice amount, the fee rate and period, and how many days the payment is overdue.
How It Works
For a percentage fee with simple interest, the charge is principal times rate times the number of fee periods elapsed, where periods are days late divided by the period length (30 for monthly, 7 for weekly, 365 for annually, 1 for daily):
With compounding, each period's fee is added to the balance before the next period is charged:
A flat fee is charged once, or, if you set it to repeat, once per started 30-day block. The calculator also reports the total amount due, the fee as a percentage of the invoice, and the equivalent annual rate, which exposes how expensive a "small" monthly fee really is: 1.5% per month equals 18% per year simple.
Parameters
| Input | Required | Meaning | |---|---|---| | Invoice amount | Yes | The unpaid principal | | Fee percentage | No | Rate per period; defaults to 1.5 | | Fee period | No | Daily, weekly, monthly, annually, or flat fee | | Days late | Yes | Days between the due date and payment | | Compounding | No | Simple (default) or compound | | Flat fee amount | No | Fixed charge when the flat option is used; defaults to $25 | | Flat fee repeats | No | Charge the flat fee again for each started 30 days |
Worked example
A 45.00 and the total due is 45.17. The 392 against $360 simple, which is why large long-overdue balances should always state the compounding basis in the contract.
Setting a late fee that holds up
A late fee is only collectible if it was agreed before the work began: print the rate, the period, any grace days, and the compounding basis in your contract and repeat them on the invoice itself. Many jurisdictions cap commercial late fees or imply a statutory rate where none was agreed, and consumer invoices are often more restricted than business-to-business ones. Keep the fee defensible as compensation for the cost of chasing and financing the delay; punitive numbers invite disputes that delay payment further.
Late fee versus interest wording
Calling the charge "interest" instead of a "late fee" is not cosmetic in some jurisdictions: interest wording can trigger lending and usury rules, while a fee framed as an administrative charge may be treated differently. Whichever your terms use, enter the matching structure here, and have local counsel confirm enforceability for your customer type before relying on the number in a demand letter.
Limitations
The calculator is arithmetic, not legal advice. It does not apply grace periods, partial payments, statutory caps, or jurisdiction-specific rules, and it assumes the fee basis you enter is the one your contract specifies. Where a payment plan or dispute is in play, model each invoice separately.
Fees work best inside a chasing workflow
The fee is the last step of a process, not the first. A reliable sequence is a friendly reminder a few days before the due date, a statement on the due date, a firmer notice at seven days with the fee clause quoted and the fee amount now showing, and the fee actually applied at fourteen to thirty days per your terms. Fees that appear without warning get negotiated away; fees that arrive exactly as the signed terms predicted get paid. The calculator's equivalent-annual-rate figure is useful here: showing a client that 1.5% monthly is 18% a year, in writing, before they sign, prevents the "I never agreed to that" conversation later.
Statutory interest when your contract is silent
Some jurisdictions give suppliers a statutory right to interest on late commercial payments even when the contract says nothing, the UK's Late Payment of Commercial Debts regime and the EU Late Payment Directive are the best-known examples, typically a central-bank rate plus a fixed margin, plus a fixed recovery sum per invoice. Others imply no right at all, leaving you to general contract law. If your terms are silent, do not assume the figure in this calculator is claimable; check the statutory position for your jurisdiction and customer type, then fix the contract for next time.
Frequently Asked Questions
What is a typical late fee?
1 to 2% per month is common in business services, equivalent to 12 to 24% per year. The calculator defaults to 1.5% monthly. Typical does not mean automatically enforceable; the agreed contract terms govern.
Does the calculator handle partial payments?
No. It models a single invoice amount overdue for a single period. If part was paid, run the calculation on the remaining balance for the days it has been outstanding.
Should I compound late fees?
Only if your contract says so explicitly. Compounding without a contractual basis is a common reason late fees get struck in disputes; simple interest is the safer default.