Late Payment Fee & Interest Calculator
Work out exactly what an overdue invoice owes in interest and fees, simple or compound, monthly or annual. Free, instant, no signup.
Trusted by 1,600+ agencies and freelancers · Rated 4.8/5 on G2 · Updated September 2026
1.5% per month (18% a year) is the most common rate freelancers charge. Not legal advice — check your local usury/contract law before charging.
What is a Late Payment Fee Calculator?
A late payment fee calculator works out exactly how much interest and admin fees have accrued on an overdue invoice, from the amount and how many days it's been late, so you can charge a defensible number instead of guessing or letting it slide.
- Supports a monthly rate (the common freelance benchmark), an annual rate, or a one-time flat fee
- Simple or compound interest, with days overdue calculated automatically from the due date
- Outputs a ready-to-paste line item you can drop straight into a follow-up email or revised invoice
How to Use the Late Payment Fee Calculator
Enter the invoice amount and due date
The original amount owed, and when it was due.
Set the payment date, or leave it unpaid
If it's already paid late, enter when; if it's still outstanding, the calculator uses today's date.
Pick a rate and interest type
A monthly or annual rate, simple or compound, or a one-time flat fee.
Get your total and a line item
See interest owed, total amount due, and a ready-to-paste line item for your next invoice or email.
What to Do Before You Charge a Late Fee
A late fee lands better, and holds up better, when it isn't a surprise.
- Confirm your original contract, quote, or invoice actually stated a late-payment rate or term
- Check whether your state or country places a legal ceiling on interest you can charge (usury limits)
- Send a friendly reminder first; jumping straight to a fee on a first-time late payment often damages the relationship more than it's worth
- Decide simple vs. compound, and monthly vs. annual, before you calculate, so the number you present is consistent with your stated terms
- Put the number in writing, an invoice line item or an email, rather than only mentioning it verbally
Simple vs. Compound Interest: What Actually Changes
| Simple Interest | Compound Interest | |
|---|---|---|
| Calculated on | The original invoice amount only | The original amount plus interest already accrued |
| Grows how | Linearly with time | Faster the longer it's overdue |
| Easier to explain to a client | Yes | Less so |
| More common in freelance terms | Yes | Less common, usually reserved for long-overdue B2B balances |
Monthly Rate vs. Annual Rate: Which Should You Use?
Most freelance and agency payment terms are written as a monthly figure, "1.5% per month" is the benchmark that shows up most often, because it's easy to state in a contract and easy for a client to understand against a single missed month. Annual rates are more common in formal B2B or statutory contexts, where a business quotes something like "8% per annum" as its standard late-payment policy. Pick whichever matches how your own terms are actually worded, since presenting a monthly calculation against annual-rate terms (or vice versa) is the fastest way to make a late fee look miscalculated.
What You Get
- Monthly rate, annual rate, or one-time flat fee, your choice
- Simple or compound interest
- Days overdue calculated automatically from the due date
- Optional flat admin fee added on top of interest
- Ready-to-paste line item for your next invoice or follow-up email
- No signup required to calculate or copy your result
Three Rate Formats, One Tool
Monthly, annual, or a flat one-time fee, whichever matches how your payment terms are actually written.
Simple or Compound
See both interest models rather than assuming one, since the difference grows the longer an invoice sits unpaid.
Ready to Paste, Not Just to Read
Get a line item worded for an invoice or email, not just a number you have to reformat yourself.
Pairs With the Follow-Up Email Generator
Calculate the fee here, then drop the number straight into a professional unpaid-invoice email.
Interest Owed on a $2,000 Invoice, 45 Days Overdue
| Rate | Simple Interest | Compound Interest (monthly) |
|---|---|---|
| 1% per month | $30.00 | $30.45 |
| 1.5% per month | $45.00 | $45.99 |
| 2% per month | $60.00 | $61.82 |
Common Mistakes to Avoid
✕ What Not to Do
✓ What to Do Instead
✕ What Not to Do
Charging interest without stating a rate in the original terms
Client disputes the charge as arbitrary
✓ What to Do Instead
Only apply late fees if your contract, quote, or invoice terms stated a rate upfront; otherwise treat this as a starting point for a conversation, not an automatic charge.
✕ What Not to Do
Starting the clock from the invoice date instead of the due date
Overcharges interest for the grace period the client was owed
✓ What to Do Instead
Enter the actual due date, interest should start the day after that, not the day the invoice was sent.
✕ What Not to Do
Mixing up monthly and annual rates
Charging 12x too much or too little
✓ What to Do Instead
"1.5% per month" and "1.5% per year" are very different numbers, pick the rate type that matches how your terms are actually written.
✕ What Not to Do
Compounding interest without disclosing it
Feels punitive to the client, harder to defend
✓ What to Do Instead
If you're going to compound, say so in your payment terms; simple interest is the more common, easier-to-explain default.
✕ What Not to Do
Applying a rate that exceeds your state or country's legal limit
Charge may be unenforceable
✓ What to Do Instead
Check local usury/contract law, or ask an accountant, before charging a rate much above the common 1-2%/month range.
✕ What Not to Do
Calculating on the original invoice total after a partial payment
Overcharges interest on money already received
✓ What to Do Instead
Enter only the outstanding balance as the invoice amount once a partial payment has come in.
Learn More
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FAQs: Late Payment Fee Calculator
What's a reasonable late payment interest rate to charge?
1.5% per month (18% a year) is the most common contractual figure freelancers and agencies use, though statutory schemes in some countries run closer to 8-12% a year. Whatever you pick, state it in your contract or payment terms upfront, before an invoice goes overdue, so it's not a surprise.
Is charging late payment interest legally required?
No, it's optional in most contract-based freelance and agency work, this calculator doesn't assume you have to charge it, only helps you work out the number if you choose to. Whether a rate is enforceable, and any maximum legal limit, depends on your state or country's usury and contract law, so check locally or consult an accountant/lawyer before charging a specific rate.
What's the difference between simple and compound interest here?
Simple interest charges the rate against the original amount for the whole overdue period. Compound interest charges the rate against the growing balance each period (interest earns interest), so it accrues faster the longer an invoice sits unpaid.
When does interest start accruing?
Typically the day after the agreed due date, not the invoice date. Enter your actual due date and the calculator counts days overdue from there.
Should I use a monthly rate, annual rate, or a flat fee?
A monthly rate matches how most freelance late-payment terms are written ("1.5% per month"). An annual rate is more common in statutory or B2B contexts. A flat fee is simplest if you'd rather charge one fixed amount than calculate ongoing interest.
Can I calculate interest on an invoice that was only partially paid?
Enter the outstanding (unpaid) portion as the invoice amount, not the original total, since interest should only accrue on what's actually still owed.
How do I actually add this to an invoice or ask the client for it?
Copy the ready-to-paste line item this calculator generates into your next invoice, or use it as the number in a follow-up email; our Follow-Up Email Generator has a dedicated "Unpaid Invoice" situation for exactly this.
Is this calculator free to use?
Yes, unlimited calculations, no signup, no watermark. Every number stays in your browser unless you choose to save your result to a free Taskip account.