Invoice Late Fee Calculator
Enter the invoice amount, due date and payment date to calculate days overdue, the late fee amount and total balance due. Supports percentage-based monthly fees or flat late charges.
Enter an invoice amount, due date, and payment date to calculate days overdue, the late fee amount, and total balance due. Supports percentage-based (per month) or flat late fees.
Check your invoice payment terms — 1–2% per month is common
Formula
Late Fee (%) = Invoice Amount × (Monthly Rate ÷ 100) × (Days Late ÷ 30) | Total Due = Invoice Amount + Late Fee
Percentage-based late fees accrue proportionally to the number of days overdue relative to a 30-day month. A 1.5% monthly rate on a 45-day overdue invoice equals 1.5% × 1.5 months = 2.25% of the invoice value. Flat fees apply a fixed charge regardless of how long the invoice is overdue.
Worked Example
Invoice of $5,000 was due 1 Jan, paid 31 Jan (30 days late). Payment terms include 1.5% per month late fee:
Days overdue = 30 days (= 1.0 month)
Late fee = $5,000 × 1.5% × (30 ÷ 30) = $75.00
Total amount due = $5,000 + $75 = $5,075.00
If the same invoice remained unpaid for 90 days: $5,000 × 1.5% × 3 months = $225 late fee, total due $5,225. Adding late fee clauses to invoices and chasing at 7, 14, and 30 days reduces average DSO (days sales outstanding) and working capital pressure.
FAQ
Frequently Asked Questions
Use this in your workflow
Use the Invoice Due Date Calculator to find the original due date from your payment terms before entering it here. Use the Working Capital Calculator to assess how overdue receivables are affecting your business liquidity. Browse all Free Business Calculators.
Worked example: overdue B2B invoice
A useful starting point before entering your own figures above.
| Item | Value |
|---|---|
| Original invoice amount | £4,800 |
| Payment terms | Net 30 |
| Invoice date | 1 April |
| Due date | 1 May |
| Payment received | 31 May |
| Days overdue | 30 days |
| Late fee rate | 1.5% per month |
| Late fee amount (1.5% × 1 month × £4,800) | £72.00 |
| Total balance due | £4,872.00 |
Interpretation: at 1.5% per month (18% per annum), a 30-day delay on a £4,800 invoice adds £72 in late charges. The longer the delay, the higher the charge — at 60 days overdue it would be £144, at 90 days £216. This makes it worth enforcing promptly rather than waiting for a larger balance to accumulate.
Limitations
Late fees are only enforceable if they are clearly stated in the agreed payment terms. If the buyer has not agreed to a late fee clause, it may not be collectable — include the clause in every quote, order confirmation, and invoice. Maximum late fee rates are regulated by law in many jurisdictions (e.g. the UK Late Payment of Commercial Debts Act, EU Late Payment Directive). This calculator is a planning tool — not legal or financial advice. Verify your applicable rate and entitlement with a qualified professional before issuing a formal demand.
When to use this calculator
- →Calculating the additional charge to include on a reminder or final demand for an overdue invoice
- →Verifying the late fee amount before raising a credit note or settlement offer
- →Reviewing your existing accounts receivable ledger for accrued late payment interest
- →Designing late fee terms for your standard invoice template or credit agreement
Frequently asked questions
What is a late fee on an invoice?
An invoice late fee is an additional charge applied to customers who pay after the agreed due date. It must be stated in the payment terms to be enforceable. Late fees compensate the seller for delayed payment, cash flow disruption, and collection effort.
What is a standard late fee percentage?
Most B2B invoices use 1–2% per month (12–24% per annum). In the UK, the Late Payment of Commercial Debts Act sets a statutory rate of 8% above the Bank of England base rate. In the US, maximum rates are regulated by state law. Always check that your rate is legally permissible in your jurisdiction.
How do I add a late fee clause to my invoices?
Include a clear statement on every invoice: "Payment is due within 30 days. Invoices unpaid after the due date will accrue a late payment charge of 1.5% per month (18% per annum) on the outstanding balance." Consistent language on invoices, quotes and contracts is essential for enforceability.
Can I charge late fees on every invoice?
You can only charge late fees if they are stated in the agreed payment terms. If the buyer never agreed to the late fee clause, it may not be enforceable. Include terms in the initial quote or order confirmation for new customers.
What is the difference between a late fee and statutory interest?
A contractual late fee is whatever rate you have agreed in your payment terms. Statutory interest is a legal right to charge interest on overdue B2B invoices even without a contractual clause — in the UK under the Late Payment of Commercial Debts Act, and in many EU countries under the EU Late Payment Directive.
Should I waive late fees to keep the customer relationship?
Many businesses waive the fee once while making it clear that future delays will be charged. Consistent enforcement, combined with earlier follow-up at 7 and 14 days overdue, is more effective than strict fee collection after 60+ days.