Calculate exactly what an overdue invoice is worth. Enter the invoice amount, the number of days overdue, and your annual interest rate, and this free calculator returns the late fee and the total amount now owed. (The interactive calculator loads with the app.)
How late fees are calculated
The standard formula is simple interest, prorated daily:
Late fee = Invoice amount × (annual rate ÷ 365) × days overdue
Example: a $2,000 invoice that is 30 days overdue at 8% annual interest accrues $2,000 × (0.08 ÷ 365) × 30 = $13.15, making the total owed $2,013.15.
What late fee rate should you charge?
Common practice: 1%–2% per month (12%–24% annually) on overdue commercial invoices
Check local law: many jurisdictions cap late payment interest or prescribe a statutory rate
State it upfront: a late fee is only enforceable if it was on the invoice or contract before the work
Sample late fee clause for your invoices
"Payment is due within 15 days of the invoice date. Overdue balances accrue interest at 1.5% per month (18% per annum) from the due date until paid in full."
More ways to prevent late payments
Send invoices immediately and follow up on the due date, not weeks later
Offer easy payment methods so paying is frictionless
For chronic late payers, require deposits or shorter terms