Late Fee Calculator

An invoice for $2,400 was due on September 15, 2026 and is paid on November 8, 2026: 54 days late. The terms say 1.5% a month on past-due balances. Charged by the day, 1.5% a month is 18% a year, so the fee is $2,400 × 18% × 54 ÷ 365 = $63.91 and the total due is $2,463.91.

If the terms charge 1.5% for each month or part of a month, the 54 days start a second month: 2 × 1.5% × $2,400 = $72. A flat $25 late fee is $25 whether the invoice is 3 days late or 54. With a 10 day grace period and interest counted from the end of the grace period, the daily method charges 44 days instead: $52.08.

For invoices between businesses there is no single federal rule in the United States. State law decides how much interest or what kind of late charge is allowed, and the limits differ from state to state. The charge also has to be something your customer agreed to: put it in the contract or quote and repeat it on every invoice. If you are not sure what your state allows, ask an accountant or a lawyer before you charge it.

If your customer is a federal agency, you do not set the rate. Under the Prompt Payment Act, late payments carry interest at a rate the Treasury publishes twice a year: 4.75% a year for July 1 to December 31, 2026. Credit cards and consumer loans have their own federal rules; this calculator is for invoices.

Say exactly how the fee works, in one line the customer reads before the work starts. For example: "Payment due within 30 days. Balances unpaid after the due date carry a late charge of 1.5% per month." Name the method (a flat fee, a monthly percent or a yearly rate), any grace period, and whether interest counts from the due date or from the end of the grace period.

Send a friendly reminder before you add the fee, and show the calculation when you do: days late, rate and amount, so the customer can check it. Some businesses waive the first fee for a good customer; if you do, say so in writing, so the waiver does not quietly become the rule.