Invoice Late Fee Calculator

This invoice late fee calculator works out what to add to an overdue invoice. Enter the invoice amount, the days past due and any grace period. Then choose the method your contract uses: a flat percentage per month, an annual interest rate charged by the day, or a one-time fee. It returns the late fee and the total now due.

How the Late Fee Is Calculated

The days charged are the days past due minus the grace period. The three methods then work differently.

Take a $2,500 invoice that is 20 days past due with a 5-day grace period. 15 days are charged. At 1.5% a month, 15 days counts as one month, so the fee is 2,500 × 0.015 = $37.50. At 18% a year charged daily, the fee is 2,500 × 0.18 ÷ 365 × 15 = $18.49.

The monthly method counts a month as 30 days and charges a full month as soon as a new one starts. That is why it gives the higher figure in each row even though 1.5% a month and 18% a year are the same yearly rate.

A one-time fee is charged once and does not grow with the days late. On the same $2,500 invoice, a 5% fee is $125 and a fixed fee of $25 is $25. A 2% fee plus a fixed $25 is $75.

What You Are Allowed to Charge

The calculator does the arithmetic. Whether you can charge the fee depends on your agreement and on the law where you trade.

• Your contract or invoice terms. Use the rate and method written there. If the terms say nothing about late payment, check the law before adding a fee.
• Legal limits. Many places cap the interest a business can charge, and the limits differ between countries and, in the US, between states.
• Consumer invoices. Rules for charging individuals are often stricter than rules for charging other businesses.

UK Statutory Interest on Late Commercial Payments

In the UK a business can claim statutory interest on a late payment from another business. The rate is 8% plus the Bank of England base rate. If no payment date was agreed, a payment is late 30 days after the customer gets the invoice, or after the goods or service are delivered if that is later. You cannot claim statutory interest if the contract sets a different rate. The rules are on the GOV.UK late commercial payments guide.

GOV.UK gives this example: with a base rate of 0.5%, statutory interest is 8.5%. On a £1,000 debt that is £85 a year, or 23p a day, so £11.50 after 50 days. To repeat it here, choose the annual rate method, enter 1,000, 50 days, a grace period of 0 and a rate of 8.5. The calculator shows 11.64 because it does not round the daily amount down to 23p. The currency symbol shown is $, and the arithmetic is the same in any currency.

You can also claim a fixed sum for the cost of recovering the debt.

Use the current Bank of England base rate when you work out a real claim. It changes over time.

Writing Late Fee Terms

• State the due date. Give a date or a number of days from the invoice date.
• State the rate and the method. Say whether it is a percentage per month or an annual rate charged daily.
• State any grace period. Say how many days pass before the fee starts and whether the fee then counts from the due date.
• Put the terms in the contract and on the invoice. The client should see them before the work starts.

For pricing the work itself, see the Project Quote Calculator and the Freelance Hourly Rate Calculator.

How to Use the Late Fee Calculator

1. Enter the invoice amount: Type the unpaid amount of the invoice.
2. Enter the days past due: Type the number of days since the due date.
3. Enter a grace period: Type the days after the due date before a fee starts. Use 0 if there is none.
4. Choose the method: Pick a flat percentage per month, an annual interest rate charged daily or a one-time fee, to match your contract.
5. Enter the rate: Type the monthly percentage, the annual rate, or the one-time percentage and fixed amount. The calculator shows the late fee and the total due.

Frequently Asked Questions