Invoice Late Fee Calculator: Interest on Overdue Bills
Enter the invoice amount, due date and the date it is paid, set your own flat fee and late payment interest rate, and see the days overdue, the whole periods charged and the total due. It does not check what your contract or local rules allow.
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Formula
Days late = payment date − due date − grace days(never below 0)Periods = whole periods in the days late(day = 1, week = 7, month = 30, year = 365 days)- Simple:
interest = amount × rate × periods - Compound:
interest = amount × ((1 + rate)^periods − 1) Late fee = flat fee + interest(only when days late is above 0)
Worked example
Invoice 5,000, due 1 January 2026, paid 15 March 2026, no grace, flat fee 25, 1.5% per month.
- Days late: 31 + 28 + 14 = 73. Whole 30-day months: 2.
- Simple interest: 5,000 × 0.015 × 2 = 150. Late fee: 25 + 150 = 175. Total due 5,175.
- Compound: 5,000 × (1.015² − 1) = 151.13, so the fee is 176.13.
Rates are yours; no legal limit is checked.
Another example
Invoice 2,500, due 1 March, paid 2 June (93 days late), 1.5% a month simple, no flat fee, no grace.
- Whole 30-day months: 93 ÷ 30 gives 3 completed periods.
- Late fee: 2,500 × 0.015 × 3 = 112.50. Total due 2,612.50.
When to use it
Use it before sending a reminder, to check a figure a client disputes, or to decide whether a flat fee, a percentage or both fits your terms. Dates drive the result, so enter the real payment date.
Common mistakes
- Charging part periods. Only completed periods are counted here, so 29 days late in a monthly plan is zero interest.
- Entering an annual rate against a monthly period. Divide an annual rate by 12 first.
- Compounding when the contract says simple interest.
- Charging a fee that the signed terms never mention.
How it differs
The simple and compound interest calculators work from a principal and a number of years. This one starts from two dates, counts completed late periods after a grace period and adds a flat fee on top.
Frequently asked questions
How is the late fee calculated?
Days late = payment date − due date − grace days. Only completed periods are charged. 5,000 due on 1 January and paid on 15 March is 73 days late, or 2 whole months. At 1.5% a month simple: 5,000 × 1.5% × 2 = 150, plus a 25 flat fee = 175.
What is the difference between simple and compound?
Simple interest charges the rate on the original amount each period. Compound charges on the fee already added. For 5,000 at 1.5% for 2 months, simple gives 150.00 and compound gives 151.13.
Does the flat fee apply if I pay on time?
No. It is added only when the days late, after any grace period, are above zero. If you pay within a 10-day grace period, the fee is 0.
Is this late fee legal?
The calculator assumes the rates you enter and checks no legal limits. Maximum late fees and interest differ by country and region, and your fee must be agreed in your contract or terms. Check local rules or ask a professional before charging.
How do I convert an annual late payment rate to a monthly rate?
Divide the annual rate by 12 and use a monthly period. An 18% annual rate is 1.5% a month, so a 5,000 invoice two completed months late carries 5,000 × 0.015 × 2 = 150 of simple interest. Enter 1.5 with the per month setting, not 18.
How do I calculate a late fee per day?
Choose the per day period and enter the daily rate. At 0.05% a day on a 5,000 invoice that is 73 days late, simple interest is 5,000 × 0.0005 × 73 = 182.50. Add any flat fee on top. Daily rates look small but add up to about 18% a year.
Is a flat fee or a percentage better for late payments?
A flat fee is simple but unfair at the extremes. A 25 fee is 5% of a 500 invoice and only 0.125% of 20,000. A percentage scales with the debt, and many businesses combine a small flat fee with interest. Whatever you choose must be in your agreed terms and allowed locally.