Late fee calculator
Enter the invoice amount, the number of days it is overdue and the way your terms calculate the fee. The calculator shows the late fee and the new total using a monthly rate prorated by the day, simple annual interest or a flat fee. Check the result against your contract before you add it to an invoice.
How the fee is calculated
- Monthly rate: fee = amount × rate ÷ 100 × days ÷ 30. A $2,400 invoice paid 45 days late at 1.5% a month: 2,400 × 0.015 × 45 ÷ 30 = $54.00.
- Annual rate: fee = amount × rate ÷ 100 × days ÷ 365. The same invoice at 11.75% a year carries $34.77.
- Flat fee: a fixed amount, such as $25, however late the payment.
If the client has paid part of the invoice, enter the unpaid balance.
Agree the fee in advance
Put the rate in your contract or quote before work starts and repeat it on every invoice: "Balances unpaid after 30 days accrue interest at 1.5% per month." A charge the client never agreed to is hard to enforce.
In the US, late fees and interest are governed mainly by state law, and usury limits and late-charge caps vary by state, so check your state's rules or ask a lawyer before choosing a rate. Send reminders first: see how to chase late payments.
UK statutory interest and compensation
Under the Late Payment of Commercial Debts (Interest) Act 1998, business-to-business debts carry statutory interest of 8% a year plus the Bank of England base rate, unless your contract sets its own rate. The base rate on 31 December applies to debts that become overdue from January to June, and the rate on 30 June to those overdue from July to December.
As of September 2026 the base rate is 3.75%, unchanged since 18 December 2025, so statutory interest is 11.75% for debts that became overdue in 2026. You can also claim fixed compensation once per invoice:
| Amount owed | Compensation |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
Frequently asked questions
Is 1.5% per month the same as 18% a year?
Nearly. The monthly method prorates by 30-day months, so a full year at 1.5% a month comes to 18.25%, while 18% a year for 30 days is about 1.48%. Use the method your terms describe.
Can I charge a late fee that isn't in my contract?
In the US, generally only if the client agreed to it in advance, in the contract, quote or invoice terms. In the UK, business customers owe statutory interest and fixed compensation under the 1998 Act even without a clause, but the Act does not cover consumers.
Is the interest simple or compound?
Simple. The fee is charged on the unpaid amount only, and UK statutory interest is simple interest under the 1998 Act. If your contract compounds interest, this calculator will understate the charge.