Late Fee Calculator

How to calculate a late fee on an invoice

The calculator treats the late fee as interest: a yearly rate applied to the unpaid amount for each day the payment is late. It uses simple interest on a 365-day year:

late fee = amount × annual rate ÷ 365 × days late

With the example in the calculator, $1,000.00 × 6% ÷ 365 × 30 days = $4.93, so the balance becomes $1,004.93. Days late are calendar days from the due date to the date in the Today field, which means weekends and public holidays count. To see what was owed on the day a customer paid, change Today to the payment date.

The rate is always a yearly rate. If your terms give a monthly rate, multiply it by 12: 1.5% per month is 18% a year. A flat fee, such as $25, or a one-time percentage does not grow with time, so add it to the balance as it is rather than running it through this calculator.

How to use the late fee calculator

1. 1

   Enter the unpaid amount

   Use what is still open on the invoice. If the customer paid part of it, enter only the rest.

2. 2

   Check the two dates

   Put in the due date shown on the invoice. Today fills in by itself; change it to see the figure for another day.

3. 3

   Choose the state

   For most states the annual rate fills in with the rate state law sets when no rate was agreed. If that rate changes over time or depends on a court, the field stays empty and the note under it says why.

4. 4

   Use your own rate if you agreed one

   If your contract or the invoice names a rate, type it over the state rate. The table further down shows each state’s limit on a written business rate.

5. 5

   Read the result

   You get the late fee, the new total, the days counted and the daily rate, with the sum written out so you can check it or quote it in a payment reminder.

What the state rate means

State law usually supplies an interest rate for money that is overdue when the two sides never agreed on one. That is the rate the calculator fills in. A separate rule limits the rate you may agree in writing. Of the 51 jurisdictions in the table below, 26 put no ceiling in their statutes on the interest rate in a written deal between businesses. In 12 the ceiling depends on the deal, for example on its size, and 13 have a fixed maximum.

Some states need more than one number:

• Texas: the 6% rate runs from day 30 after the due date, so the calculator leaves out the first 29 days. On $1,000.00 that is 45 days late, 16 days earn interest: $1,000.00 × 6% ÷ 365 × 16 days = $2.63.
• Virginia: interest at 6% starts on day 61 after the invoice was presented and left unpaid. When you choose Virginia, the date field asks for the day you presented the invoice.
• Delaware, Florida, Louisiana, Maine, Nevada, New Jersey and Ohio: the rate follows a published figure that is reset from time to time, for example each quarter or each year. The field stays empty, and the note links the latest figure recorded here.
• Michigan: no automatic rate applies when the contract says nothing about interest.
• Connecticut, New Mexico and Tennessee: the figure is a rate a court can award or an upper limit, so the field stays empty and you enter the rate that applies to you.

Rent late fees

Late rent on a home is covered by landlord–tenant law, which is separate from the interest rules above. The Rent tab covers only the states whose rent statute we have checked against the text the state publishes:

• Massachusetts: a lease cannot add interest or a penalty for unpaid rent until 30 days after the due date. The tab gives you that date.
• Hawaii: when the rental agreement provides for a late charge, it can be no more than 8% of the rent due.
• New Mexico: when the rental agreement provides for a late fee, it is capped at 5% of the rent for every rental period the tenant is behind. Only rent counts, not deposits, other fees or utilities, and the landlord has to give notice of the fee by the last day of the next rental period.

For other states, verified data is not available here yet, so they cannot be chosen in the Rent tab. Check your lease and your state’s landlord–tenant law instead.

How much can I legally charge for a late fee?

It depends on the state and on whether a rate was agreed. The table lists, for every state and the District of Columbia, the rate that applies when none was agreed and the limit on a rate agreed in writing between businesses, with the statute and the date the row was last checked against its source. It covers business invoices, not consumer loans or rent.

Figures with a period, such as a weekly or quarterly rate, are the ones recorded on the date in the Checked column. Check the linked page for the current figure.

Put the late fee on the invoice

Write the rate and the day it starts on the invoice itself, so the customer sees it before the due date. The Free Invoice Generator has a Terms and conditions field for this, and the invoice downloads as a PDF.