Invoice Late Fee Calculator

Invoice amount, days overdue, and how your terms charge — monthly percent, annual rate, or flat fee — get the accrued fee and the new total due.

Free — no signup Runs in your browser Pairs with the Demand Letter
Worked example

A $4,500 invoice, 45 days late at 1.5% a month

Example: $4,500 · 45 days overdue · 1.5%/month

The most common commercial late-fee term is 1.5% per month (18% per year), prorated by days:

Months late = 45 ÷ 30 = 1.5
Late fee    = $4,500 × 1.5% × 1.5 = $101.25
Total due   = $4,500 + $101.25 = $4,601.25

The fee only holds up if the client agreed to it — on the invoice terms, the contract, or both — before the work happened. When you chase the payment, the demand letter should state the principal, the accrued fee, the daily accrual going forward, and a pay-by date.

FAQ

Invoice late fee questions

1%–2% per month is the commercial norm, with 1.5% (18%/year) the most common. The ceiling is your state’s usury or interest statutes — and for business-to-business invoices some states allow whatever the contract says. The key requirement everywhere: the client must have agreed to the term before the invoice went unpaid.
Adding a penalty retroactively rarely holds up — but many states have prejudgment-interest statutes that let you claim interest on overdue commercial debts at a statutory rate even without a contract term. Going forward, put the late-fee clause on every invoice and in every services agreement.
Used correctly it does the opposite — a late fee that accrues daily creates a reason to pay now rather than later. The standard sequence: a friendly reminder at a few days late, a firm notice with the accruing fee stated, then a formal demand letter with the total and a deadline before escalation.
Simple accrual on the principal (which this calculator uses) is the defensible standard. Compounding late fees — charging interest on interest — is more likely to be challenged and is restricted in some states. The fee’s job is leverage to get paid, not to become its own revenue line.

This calculator provides general estimates for planning purposes and is not legal, tax, or financial advice. Maximum interest on overdue invoices is limited by state law; enforceability depends on agreed terms.

You know the number.
Now ask for it properly.

BizDocs writes a formal demand letter — principal, accrued fees, deadline, and next steps — the document that gets invoices paid without a lawyer.

Create a Demand Letter All Calculators