FREE TOOL
Late fee calculator
Work out what a late fee comes to on an overdue invoice: a percentage per month, a one-time percentage, or a flat fee, with an optional grace period.
LATE FEE
$45.00
NEW TOTAL DUE
$1,545.00
1.5% per month × 2 months (45 chargeable days, each started 30-day period counted).
18% a year. Many states cap late charges or interest; check yours before charging this.
For estimates only, not legal or financial advice. Monthly percentages are calculated as simple (not compounding) charges for each started 30-day period after any grace period.
How to charge a late fee the right way
Agree on it before the work starts. Put the fee in your contract or in the payment terms on every invoice, for example: "Payment due within 30 days. Balances more than 15 days past due are subject to a 1.5% monthly late charge."
Use a grace period. Charging the day after the due date can feel petty. A short grace period keeps the fee for clients who are genuinely late.
Tell the client before it applies. A reminder that mentions the upcoming fee often gets the invoice paid before you ever have to charge it. Our overdue invoice email templates include one for exactly that.
Check your state's limits. Many states cap late charges or interest. If you're unsure, ask your accountant.
Let the late fee add itself
Ledgerhawk can apply a one-time percentage late fee automatically once an invoice passes your grace period, update the client's payment link to the new total, and keep sending polite reminders until it's paid.
Start free for 14 daysNo card required. $25/month after the trial.
Common questions
What is a typical late fee on an invoice?
Many small businesses charge 1% to 1.5% of the balance per month, or a flat fee such as $25 to $50. What's reasonable depends on your industry, the invoice size, and the rules in your state.
Can I charge a late fee if it wasn't in my agreement?
Generally you should only charge a late fee that the client agreed to in advance, in your contract, agreement, or the payment terms on the invoice. Adding one after the fact often leads to disputes and may not be enforceable.
Is there a legal limit on late fees?
Many US states cap late charges or interest, and the limits vary by state and by type of transaction. Check your state's rules, or ask an accountant or attorney, before setting a rate.
What's a grace period?
A grace period is a number of days after the due date before any late fee applies, for example 10 or 15 days. It gives clients a little room and makes the fee feel fair rather than punitive.