Late Payment Fee Calculator
Work out exactly what a customer owes on an overdue invoice. Enter the invoice amount, interest rate, and days overdue, and the calculator applies flat fees, simple monthly interest, or compound accrual — including grace periods.
How are late fees calculated?
Late fees are typically either a flat charge or a monthly interest rate applied to the outstanding balance. A common commercial rate is 1.5% per month (18% per year). Interest may be simple or compound, and many contracts include a grace period before charges begin.
What is a reasonable late fee?
Most jurisdictions allow reasonable contractual late fees; 1–2% per month is standard commercial practice in the US. Your invoice or contract should state the rate before you charge it — this calculator helps you quote the exact figure.
Example calculation
$1,000 invoice, 60 days overdue, 1.5% monthly interest, no grace period:
Month 1 interest: $15.00 · Month 2 interest: $15.23 (compound)
Total due: $1,030.23
Frequently Asked Questions
What late fee can I legally charge?
It varies by jurisdiction and contract. 1–2% per month is common commercial practice, but the rate should be stated in your payment terms. This tool is informational, not legal advice.
Does it support compound interest?
Yes. Choose simple or compound accrual and set an optional grace period.
Can I use the result in a past-due notice?
Yes. Pair it with the past due notice generator to itemize the interest on a formal letter.