How it works
This calculator works out simple interest on an overdue invoice from the day after the due date (plus any grace period) to the payment date, and adds a flat late fee if your terms include one.
A monthly rate is converted to an annual rate (1.5% per month = 18% per year) and charged daily on a 365-day year, so partial months are prorated.
You can only charge late fees or interest that your contract or invoice terms set out in advance, and many US states cap the rate. Check your state's rules before applying a rate.
Formula
Interest = Invoice amount × Annual rate ÷ 365 × Days late (after grace). Total = Interest + Flat fee.
Questions people ask
What is a typical late fee on an invoice?
A common term is 1.5% per month (18% a year) on the overdue balance, or a flat fee such as $25–$50. Some businesses use whichever is greater.
Can I charge interest on a late invoice if it wasn't in my terms?
Generally, contractual late fees need to be agreed in advance, usually in the contract or on the invoice. Some states allow statutory interest on unpaid debts, but the rate and rules vary.
Is a monthly rate the same as annual divided by 12?
For simple interest, yes. 1.5% per month equals 18% per year. If interest compounds monthly, the effective annual rate is slightly higher, about 19.56%.