Calculate exactly how much you're owed on a late invoice — and get ready-to-use payment terms language for your next invoice.
Enter your invoice details to calculate
| Item | Amount |
|---|---|
| Original Invoice | — |
| Late Fee Rate | — |
| Period Overdue | — |
| Late Fee | — |
| Total Due | — |
Late fees compensate you for the cost of waiting on payment — the time spent chasing invoices, the cash flow disruption, and the implicit loan you extended to your client. Calculating them correctly depends on which type of fee you charge.
A $2,000 invoice is 45 days late (1.5 months). At 1.5% per month: $2,000 × 1.5% × 1.5 = $45 late fee. Total now due: $2,045.
The most common late fee in freelance and small business invoicing is 1.5% per month, which works out to 18% annually. This rate is widely recognized, easy to calculate, and within the legal limits of most US states.
Some businesses charge more — 2% per month is common in construction and B2B services. A few states cap monthly rates, so if you're unsure, 1.5% is the safe universal default. When in doubt, check your state's usury laws or consult an attorney.
A percentage-based fee scales with the invoice amount, which is fair for both parties — larger invoices carry a proportionally larger penalty. This is the standard approach for professional services, consulting, and creative work.
A flat fee works better for small invoices. If your average invoice is $200, a 1.5% monthly fee is only $3 — not meaningful enough to motivate faster payment. A flat $25/month signals you're serious without requiring a complex calculation.
Some freelancers combine both: "A late fee of 1.5% per month or $25, whichever is greater." This covers both small and large invoices effectively.
Your late fee is only enforceable if you disclosed it before the client agreed to the work. The best place to state it is in your invoice payment terms. Here are some templates:
Most freelancers follow this sequence when an invoice goes unpaid:
Day 1–3 after due date: Send a friendly payment reminder. Most late invoices are genuine oversights — an email saying "Just checking in on invoice #123, due [date]" resolves the majority of cases without escalation.
Day 7–14: If no response or payment, send a follow-up noting that a late fee is accruing per your invoice terms. Attach the original invoice.
Day 30+: Send an updated invoice showing the original amount plus the accumulated late fee. Keep the tone professional — you want to be paid, not start a conflict.
Day 60+: If still unpaid, consider a demand letter or small claims court depending on the amount. For larger amounts, an attorney's letter often prompts payment without going to court.