Invoice Late Fee Calculator

How do I calculate a late fee on an invoice?

Enter the unpaid balance on the due date, then calculate through the payment date or today. Choose a monthly percentage or a one-off fixed amount. The result separates the fee from the remaining principal.

Enter grace days and payments received after the due date. Simple interest charges principal alone; monthly compounding includes earlier interest. Open Show the math for each balance and period. The tool uses US dollars.

How much is 1.5% monthly interest on a $2,000 overdue invoice?

Take an illustrative $2,000 invoice due on March 1 and calculate to April 15 of the same year. There are 45 calendar days between those dates. At a monthly rate of 1.5%, the monthly charge is $2,000 × 0.015 = $30. Divide by the tool’s 30-day month to get $1 per day. With no grace period or payments, simple interest is $1 × 45 = $45, and the unpaid principal plus fee is $2,045.

Now add a $1,000 payment dated March 16. The first 15 days use the $2,000 balance and contribute $15. The remaining 30 days use $1,000 and contribute another $15. The fee becomes $30 and the total still due becomes $1,030. The payment date ends the earlier balance period. These are arithmetic examples, rather than published typical rates or recommended charges.

How do grace periods change the number of days charged?

The due date itself contributes zero chargeable days. A grace period then moves the start of accrual forward by the number of days entered. For example, an invoice due March 1 with five grace days has no fee through March 6. A calculation dated March 7 has one chargeable day. For the $2,000 example at 1.5% monthly, that first day contributes $1 of simple interest.

Grace days are excluded, with no backdated charge when they expire. Dates before or on the due date produce zero fees in either mode. Calendar-day counting avoids daylight-saving differences; Today uses your device’s date when the page opens.

What is the difference between a fixed late fee and a monthly percentage?

A fixed fee is one amount, such as a $25, once a chargeable day exists and principal remains. It stays $25 across one day or several months. A monthly percentage scales with the balance and delay, prorated by day.

For the same $2,000 balance, 1.5% monthly simple interest is $15 after 15 chargeable days and $30 after 30; a $25 fixed fee stays $25. Switching modes keeps dollar and percentage inputs separate.

How are simple and monthly compound late-payment interest different?

Simple interest uses the unpaid principal as its base throughout each period. Accrued fees stay separate and do not earn interest. With an unchanged $2,000 balance and a 1.5% monthly rate, 60 chargeable days produce $60 of simple interest. Monthly compounding instead adds the interest from each completed 30-day period to the amount used for the next one. After the first period, the next period’s base is $2,030; another 1.5% produces $30.45, for $60.45 in total fees.

Incomplete compound periods use the current base × rate × remaining days ÷ 30. Earlier interest is added every 30 chargeable days, rather than daily or at calendar month-end. The final fee is rounded once; rounded individual periods can differ by a cent from their sum.

How do partial payments reduce an invoice late fee?

Enter principal payments received between the due date and calculation date, each with a date and positive amount. Payments are sorted by date; same-day payments are combined. Payments during grace reduce the balance before charging starts. A payment on the calculation date reduces the total after that period’s accrual.

For payments received before the due date, enter the remaining due-date balance in the main amount field. The entries do not allocate a payment between fees and principal: every amount entered is treated as a principal payment. Overpayments and future-dated entries produce an error instead of a negative balance. Simple interest stops accruing once principal is fully paid, although a fee already accrued remains visible. No fixed fee is triggered when principal was cleared before charging began.

What if the client pays the original amount but not the late fee?

Enter the original principal and record its payment on the date received, then calculate through that date. In the $2,000 example paid on April 15, 45 chargeable days at 1.5% monthly simple interest produce $45. The principal payment clears $2,000, leaving $0 principal and $45 accrued fees: the total still due is $45, not $2,045.

For a later cutoff, simple interest stays $45 once principal is cleared.

Which state interest limits are included in this calculator?

Vermont is the sole state reference in this calculator. Its 9 V.S.A. § 41a sets a general 12% annual rate using the actuarial method, except where law provides otherwise. Separate loan and credit categories have different provisions. Section 41a(d) generally uses a 365-day year, or 366 in leap years, with specified exceptions allowing a 30-day month and 360-day year. Checked October 13, 2026.

The selected reference compares simple monthly interest × 12 or the compound annual equivalent, ((1 + monthly rate ÷ 100)^12 − 1) × 100. Exceeding it shows a rate error and disables creating the fee invoice until corrected. Fixed fees are excluded from this percentage comparison. The calculation above uses 30-day periods; selecting a reference does not switch its day-count method.

Who uses an invoice late fee calculator?

Freelancers and contractors

Keep overdue work tied to its original invoice number. For a $600 service invoice, a $15 fixed charge produces $615 still due once the grace period has ended. Federal agency payments follow the separate Prompt Payment framework: the Bureau of the Fiscal Service explains agency interest obligations and provides daily and monthly-compounding calculators with the applicable rate periods.

Small businesses and agencies

Keep dates and payments attached to each client’s invoice. A $3,000 agency invoice at 1% monthly simple interest over 20 chargeable days gives $3,000 × 0.01 ÷ 30 × 20 = $20. Record received payments before comparing client totals.

Construction subcontractors

Keep progress invoices and milestones separate. A $4,000 invoice with five grace days and 35 overdue days has 30 chargeable days. At a 0.5% monthly simple rate, its fee is $20. Use its due date rather than the whole job’s completion date.

How can freelancers and contractors bill the calculated late fee?

Enter the original invoice number, then choose Turn into an invoice to create an editable invoice after free registration. The new invoice has one late-fee line: quantity 1 and the calculated fee in the Rate column. Its description names the original invoice and days overdue; notes carry the method, grace days and chargeable days. For a $45 result, that line’s rate and amount are both $45. Add the client and review the description before finishing.

Or make it without an account sends the same fee line to the free invoice generator. Only the late fee is transferred; the original invoice and its principal stay unchanged.

Should I charge a late fee, and how should I write the terms?

If a late fee forms part of the agreement, include it in payment terms before work begins. State the due date, grace period, fee method, balance charged and start date. Identify the percentage’s time period and compounding method. For wording and payment reminders, read how to charge late fees on invoices.