Pricing & business / Late payments
Work out a late payment fee
Add simple daily interest and any flat fee to an overdue invoice, using the rate in your terms.
Amount due / USD
Total now owed
Enter invoice amount.
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What it covers: Add daily interest and any flat fee to an overdue invoice.
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How to work out a late payment fee on an overdue invoice
When a customer pays late, you may be able to charge interest and, in some places, a flat late fee. This calculator works out daily interest on an overdue invoice and adds any flat fee you enter. What you are allowed to charge depends on your payment terms and the rules where you work, so check those first.
- Check your payment terms. Interest and late fees are easiest to recover when the customer agreed to them before the work started.
- Choose the yearly interest rate. Use the rate in your terms, or the rate the law sets where you work if your terms do not give one.
- Count the days overdue from the due date on the invoice, not from the date you sent it.
- Work out the daily interest: the invoice amount times the yearly rate, divided by the number of days in a year. Multiply that by the days overdue.
- Add a flat late fee only if your terms or local rules allow one.
- Send the customer a clear statement showing the original invoice, the days overdue, the interest and any fee.
Tips and common mistakes
- Put your late payment terms on every quote and invoice so customers know about them before they agree to the work.
- Send a polite reminder soon after the due date. It gives the customer a chance to pay before you add charges.
- This calculator uses simple daily interest on the invoice amount. If your terms say something different, follow your terms.
- Keep a record of due dates, reminders and payments in case you need to take the debt further.
Questions
Can I charge interest on a late invoice?
In many places you can, if your terms allow it or the law gives you the right. The rules differ between countries, and sometimes between business and private customers. Check the rules where you work, and agree the rate in your terms up front.
How do I calculate interest on an overdue invoice?
Multiply the invoice amount by the yearly interest rate, then divide by the number of days in a year to get the daily interest. Multiply the daily interest by the number of days overdue. Enter the invoice, days overdue and rate in the calculator to do it for you.
What is a reasonable late payment fee?
There is no single answer. Some places set or limit late fees by law, and some do not allow them for certain customers. Use a fee that is in your terms and allowed where you work, and keep it in proportion to the cost of chasing the debt.
When does late payment interest start?
It normally starts from the day after the payment due date on your invoice or contract. If you did not set a due date, local rules may set one for you. Check the rules where you work.
Do I have to charge a late fee every time?
No. You can choose to waive interest or a fee, for example for a regular customer who pays as soon as they are reminded. Whatever you decide, be consistent and keep a record of it.
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