⏳ Late Payment Interest Calculator
See exactly how much late fee to charge an overdue invoice.
18% annually (1.5%/month) is a common freelance late fee rate — check your invoice terms and state rules.
How This Is Calculated
Daily Rate = Annual Rate ÷ 365. Late Fee = Invoice Amount × Daily Rate × Days Overdue. This is simple (non-compounding) interest, the most common method for invoice late fees.
Frequently Asked Questions
What late fee rate can I charge as a freelancer?
There's no single legal maximum everywhere in the US — allowed rates vary by state and by what your
contract specifies in advance. A common practice is 1-1.5% per month (12-18% annually), but state your
policy on the invoice before work begins, and check your state's rules.
Guide: understanding your result
- Simple late interest = Amount × annual rate × days late ÷ 365.
- The rate that applies comes from your contract first; if there is none, state law sets a legal or judgment interest rate, and usury laws cap what can be charged.
- Payments owed by federal agencies to contractors fall under the Prompt Payment Act, whose rate the Treasury sets twice a year.
Worked example
An invoice of $5,000 paid 90 days late at a contractual 12% annual rate accrues $147.95 of interest.
Common mistakes to avoid
- Applying a monthly rate as if it were annual.
- Charging a late fee that your contract or state law does not allow.
- Compounding interest when the agreement provides for simple interest.
Frequently asked questions
Can I add late fees to my invoices?
Only if they are agreed in advance (for example in your contract or invoice terms) and comply with your state's laws. For disputes, consult an attorney.
Official sources
Examples are calculated live from the same data the calculator uses and are for education only — they are not financial, tax or investment advice.
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