Tiny Toolkit

Invoice Late Fee Calculator

Calculate the late fee owed on an overdue invoice based on the outstanding balance, your late fee rate, and the number of days past due. Supports both flat-rate and compounding daily/monthly methods. Knowing the exact amount to charge makes it easier to include a precise figure in your payment reminder and ensures you're applying fees consistently across clients.

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Frequently Asked Questions

What is a typical late fee rate for invoices?
The most common rate is 1.5% per month (18% annualized), but rates vary widely. Some businesses charge a flat fee of $25 to $50; others use 2% per month. Always check local laws, as some jurisdictions cap late interest rates on commercial invoices.
How does a grace period affect the late fee?
A grace period delays when the fee clock starts. If an invoice is 30 days overdue with a 10-day grace period, the fee is calculated on 20 billable days, not 30. Setting a grace period can improve client relationships while still protecting you from serial late payers.
Do I need to state my late fee policy upfront?
Yes. Late fees are only enforceable if they are disclosed in your contract or on the original invoice. Adding a clause like 'Invoices unpaid after 30 days are subject to a 1.5% monthly late fee' protects you legally and sets clear expectations with clients.
What is the effective annual rate of a 1.5% monthly fee?
A 1.5% monthly fee compounds to approximately 19.56% annually (calculated as (1 + 0.015)^12 - 1). The calculator uses a simple (non-compounding) annualized rate of 18%, which is the standard way late fees are stated on invoices.

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