Invoice Late Fee Calculator
Enter the invoice amount, your monthly interest rate, and how many days the payment is overdue to calculate the late fee and updated total.
| Late fee | |
| Original invoice | |
| Total now due | |
| Daily interest rate |
How invoice late fees are calculated
Most businesses charge late fees as monthly interest on the unpaid balance. Because payments rarely arrive exactly one month late, the monthly rate is prorated by day: divide the monthly rate by 30 to get a daily rate, then multiply by the invoice amount and the number of days overdue. As a formula: Late fee = Invoice amount × (Monthly rate ÷ 100) × (Days late ÷ 30).
For example, on a $2,000 invoice with a 1.5% monthly interest rate that is 45 days overdue: 2,000 × 0.015 × (45 ÷ 30) = 2,000 × 0.015 × 1.5 = $45.00. The total now due is $2,000 + $45 = $2,045.00.
This calculator uses simple (non-compounding) interest, which is how most standard invoice late fee terms are written. Check your contract or invoice terms for the agreed rate, and note that many jurisdictions cap the maximum interest you can legally charge.
Frequently asked questions
What is a typical late fee on an invoice?
Most businesses charge between 1% and 2% per month (12–24% per year) on the overdue balance. The rate should be stated in your contract or on the invoice itself, and it must not exceed the maximum interest rate allowed in your jurisdiction.
When can I start charging a late fee?
Only after the payment due date stated on the invoice has passed, and only if your payment terms disclosed the late fee policy in advance. Many businesses also apply a short grace period (for example 5–10 days) before interest starts accruing.
Is the late fee simple or compound interest?
This calculator uses simple interest: the fee is charged on the original invoice amount only, prorated by the number of days late. Some contracts specify monthly compounding, where each month's interest is added to the balance before the next month's charge — that produces a slightly higher fee over long periods.