Invoice Late Fee Calculator

Late fees turn 'I'll get to it' into 'I'll pay it now'

A late-payment fee that is written into your terms and actually applied changes client behaviour. It signals that your time and cash flow have a price. This calculator works out the interest owed from the outstanding amount, the number of days overdue, and your stated rate.

Choose a flat fee for a simple penalty, simple interest for a daily charge on the original amount, or compounding for longer overdue periods. Always set the expectation in your contract and on the invoice before you apply it.

What rate can I charge?

Common practice is 1–2% per month, or a statutory rate where one applies. Many jurisdictions set a legal maximum and some give small businesses a statutory right to interest plus a fixed recovery fee on late commercial payments. Check the rules where you and your client operate, and keep your rate reasonable and disclosed.

In the EU you may already have the right, whether or not you asked for it

Freelancers often assume a late fee only exists if they wrote one into the contract. Across the EU that is not the case for business-to-business invoices. Directive 2011/7/EU gives creditors a statutory right to interest on late commercial payments at the central bank reference rate plus at least eight percentage points, and a fixed minimum of €40 as compensation for recovery costs — payable, in the directive's words, without the necessity of a reminder.

Member states implement it in their own law, so the exact reference rate and any additional rules depend on where you and your client are established. But the shape is consistent: on a B2B invoice, late payment has a legally defined price, and it is usually higher than the 1% a month most freelancers timidly write into their terms.

This does not apply to consumers, and it is not a substitute for legal advice on your specific contract. It does mean that "I never agreed to a late fee" is a weaker argument than a slow-paying client thinks.

The fee is leverage, not income

Almost nobody collects late fees. That is not the point of having one. The point is that an invoice carrying a visible, accruing number behaves differently in a client's accounts-payable queue than one that does not, because yours is the only invoice on the pile that gets more expensive by waiting.

Which is why how you apply it matters more than the rate. A reminder that shows the running interest — the original amount, the days elapsed, the interest to date, and the total if paid this week — converts far better than a threat, because it reads as arithmetic rather than conflict. You are not being difficult; you are stating a number that was always going to be true.

Waiving the fee once payment arrives is a perfectly good move, and it costs you nothing. You keep the client, you keep the relationship, and you have quietly established that your invoices are the ones that get paid first.