Invoice late fee calculator
Late fees only work if they were agreed before the work started and the rate is enforceable where you are. This shows what you are owed, and what your rate looks like annualised.
Total now owed
Not enough detail yet
Enter the invoice amount and how overdue it is to work out what you are owed.
- Original invoice
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- Late fee
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- Months overdue
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- Annualised rate
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How this is worked out
The calculator turns days overdue into months by dividing by 30.44, the average length of a month, and then applies your monthly rate in one of two ways.
With simple interest, the fee is charged only on the original invoice: amount × monthly rate × months overdue. A $5,000 invoice that is 60 days late at 1.5% a month has run 1.97 months, so the fee is about $148.
With compounding, each month's fee is added to the balance and the next month's fee is charged on the larger amount. Over short periods the difference is small (about $149 in the same example), but it grows the longer an invoice goes unpaid.
The annualised rate shows what your monthly fee is as a yearly figure: 12 times the monthly rate for simple interest, or (1 + monthly rate) to the power of 12, minus 1, when compounded. At 1.5% a month that is 18% simple or about 19.6% compounded. It is the number to check against any cap in your state.
A late fee is only as good as the agreement behind it. It should be in your contract or on the original invoice before the work starts, at a rate that is lawful where you and your client are. Any late fees you do collect count as business income and are taxable like the rest of your revenue.
Common questions
What is a reasonable late fee for an invoice?
1 to 1.5% per month is the common range, which annualises to 12 to 18%. Several states cap what you may charge, and an unenforceable rate is worse than a modest one.
Can I add a late fee after sending the invoice?
Rarely with any force. A late fee generally has to be in the contract or on the original invoice before the work started. Adding one afterwards is hard to enforce.
Should late fees compound?
Simple interest is the safer default. Compounding fees are harder to defend and, in some states, unenforceable.
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Estimates based on published federal rules for tax year 2026. State and local tax is not included. This is general information, not advice about your situation.