About the Late Payment Fee Calculator
This late fee calculator works out what a customer owes when an invoice or bill is paid after its due date. Enter the invoice amount, the due date, the date payment is (or will be) made, any flat late fee and the interest rate in your terms — either a monthly rate such as 1.5% per month or an annual rate — and it returns the days overdue, interest accrued, total late charges and the new amount due.
Freelancers, contractors, landlords and small businesses can use it to calculate late charges before sending a reminder, and customers can use it to check a charge they have been billed. A grace period option lets you waive charges if payment arrives within a few days of the due date.
Interest is simple daily interest on the original invoice amount, counted from the due date. The fee and rate must be allowed by your written terms and by local law — many US states cap late fees and interest, and in the UK the Late Payment of Commercial Debts Act sets statutory interest for business-to-business debts.
With the default inputs, the total amount due is $5,234.93. Change any value above to recalculate instantly.
How to use the late payment fee calculator
- 1Enter the invoice amount and its due date.
- 2Enter the date the payment arrived or is expected.
- 3Enter the flat late fee and interest rate from your payment terms.
- 4Add a grace period if your terms allow one.
- 5Use the total due and milestone table when you send the reminder.
Formula and method
The calculator counts calendar days from the due date to the payment date. If that is within the grace period, no fee or interest is charged. Otherwise the flat fee applies once and simple interest accrues daily on the original invoice amount for every day since the due date.
A monthly rate is converted to an annual rate by multiplying by 12 (1.5% per month = 18% per year), then divided by 365 to get the daily rate. Interest is not compounded and is not charged on the late fee itself. Check your contract and local law: some jurisdictions cap fees, require them to be disclosed in advance, or set a statutory rate.
- Amount
- Original unpaid invoice amount
- Annual rate
- Yearly late interest rate (monthly rate × 12)
- Days late
- Calendar days from due date to payment date
Worked examples
$5,000 invoice paid 75 days late at 1.5% a month
June 1 to August 15 is 75 days. At 1.5% a month (18% a year) the daily rate is 0.0493%, so interest is $5,000 × 0.18 ÷ 365 × 75 = $184.93. Adding the $50 fee brings the total due to $5,234.93.
Annual 8% interest, no flat fee
The invoice is paid 60 days late. Simple interest at 8% a year is $12,000 × 0.08 ÷ 365 × 60 = $157.81, so the customer owes $12,157.81.
Paid inside a 10-day grace period
Payment arrives 9 days after the due date, within the 10-day grace period, so neither the $35 fee nor interest applies and $2,500 is due.
Paid after the grace period ends
At 19 days late the grace period has passed, so the $35 fee applies and interest runs from the due date: $2,500 × 0.18 ÷ 365 × 19 = $23.42, for a total of $2,558.42.
Frequently asked questions
How do you calculate a late fee?+
Count the days between the due date and the payment date, apply any flat fee from your terms, and add interest: invoice amount × annual rate ÷ 365 × days late. A 1.5% monthly rate is 18% a year.
What is a typical late fee on an invoice?+
Many businesses charge 1% to 1.5% per month on overdue balances, or a flat fee of around $25 to $50 for smaller invoices. Whatever you use must be stated in your contract or invoice terms before the work is done.
Is there a legal limit on late fees?+
Often, yes. Many US states cap late fees or interest rates under usury or consumer protection laws, and rules for residential rent are usually stricter. In the UK, businesses can claim statutory interest of 8% above the Bank of England base rate on B2B debts.
Can I charge interest on the late fee itself?+
This calculator does not, and in many places compounding charges on fees is restricted or must be explicitly agreed. Charging simple interest on the original balance is the safest and most common approach.
Does a grace period delay when interest starts?+
In this calculator the grace period decides whether charges apply at all. If payment is late beyond the grace period, interest is counted from the original due date, which matches most contract wording. Check your own terms.
Results are general estimates and not legal advice. Laws vary by jurisdiction — consult a qualified attorney.