Invoice Late Fee Laws by US State: What You Can Charge

Most "late fee by state" tables online mix up three different numbers: the rate a court or statute applies when the contract says nothing, the usury ceiling on loans, and the fee a contract can validly set. This guide keeps them separate. It quotes only state rules we read in the statute itself, explains how to word a late fee on an invoice, and works through what the same overdue $2,400 invoice could cost under each approach.

Last reviewed: October 27, 2026. Statutes accessed October 27, 2026. This is general information about business-to-business invoices, not legal advice. Consumer debts, rent, loans and regulated industries have their own rules. Ask a lawyer licensed in your state before charging or collecting a late fee.

Is there a federal limit on invoice late fees?

No. There is no single federal cap on late fees or interest for invoices between private businesses. Limits come from state law and from your contract, and they differ by state and by whether your client is a business or a consumer. That is the same framing used on our late fee calculator, which also covers the UK and EU statutory rates.

Three kinds of state rule can apply to a late invoice:

Whether an unpaid invoice counts as a "loan or forbearance" for a usury statute is a legal question that depends on the state and the facts. Treat usury ceilings as an outer boundary, not as a target.

What four state statutes actually say

We quote only states whose statute text we read on the official legislature site or an archived copy of it. If your state is not here, find its statute through your legislature's website, or start from Cornell's Legal Information Institute state law resources, rather than relying on a summary table.

Notice how different these are. Texas and California give you a modest default rate when you agreed nothing, which is a strong reason to agree a rate. New York's 16% ceiling cannot be raised as a defense by a corporate client, but a sole-proprietor client is a different case. Florida's 18% is a usury line, not a recommended late fee.

Why "1.5% a month is legal everywhere" is wrong

Many guides call 1% to 1.5% a month "standard and enforceable in most states". No statute says that. A few problems with the shortcut:

• It ignores whether a rate was agreed. Without agreement, Texas allows 6% a year from day 30, not 18%.
• It ignores who the client is. Consumer contracts face stricter disclosure and penalty rules than business contracts, as California's §1671 shows.
• It hides the per-month trap. "1.5% for each month or part of a month" charges a full month for one late day. A 45-day delay is two months, so 3% of the invoice, not 18% × 45 / 365.
• It ignores ceilings. A rate that sits under one state's usury line can exceed another's.

Worked example: the same overdue $2,400 invoice

Illustrative example. A $2,400 invoice due on July 1, paid 45 days late on August 15. Simple interest uses days late ÷ 365, as in our late fee calculator.

The lesson is not which number is biggest. It is that an agreed, clearly worded rate is the only one you control. Without it you fall back to the state default, and in Texas that is about $6 on this invoice.

How to write a late fee into your terms and invoice

Put the late fee in the contract or proposal your client accepts before work starts, then repeat it on every invoice.

1. State the trigger: the due date and when the fee starts ("from the day after the due date" or "after a 10-day grace period").
2. State the basis: a flat amount, or a percentage rate that says whether it is per year, per month or per part month, and whether it is simple interest.
3. Add a legal-maximum fallback: "or the maximum rate permitted by law, if lower". It does not make an unlawful rate lawful.
4. Show it on the invoice: for example, "Payment due within 30 days. Overdue balances accrue simple interest at 1.5% a month (18% a year) from the due date, or the maximum permitted by law if lower."
5. Bill it separately and show the maths: "Late payment interest: $2,400 at 18% a year for 45 days = $53.26."
6. Apply it consistently, so every client knows what to expect.

For the full set of invoice fields, see what to include on an invoice, and for terms such as Net 30, see invoice payment terms.

When to talk to a lawyer instead

A late fee is the wrong tool when:

• Your client is a consumer. Consumer credit and disclosure rules can apply, and some states treat consumer late charges much more strictly.
• You are in a regulated field, such as healthcare, rentals or lending, where specific statutes set late charges.
• The amount is large or already disputed. Collection, prejudgment interest and attorney fees depend on state procedure; a demand letter from a lawyer may do more than a late fee.
• The contract is governed by another state's law, or your client is abroad. In the UK and EU, statutory interest applies to business debts even without a contract term; our late fee calculator explains the UK 8% plus base rate rule.

Late fees in InvoiceQuickly

InvoiceQuickly does not calculate or add late fees automatically. What you can do today:

• write your late fee policy in the invoice terms (up to 5,000 characters), so it appears on every PDF
• on Pro, send scheduled payment reminders before and after the due date
• record full or partial payments on any plan and see the remaining balance
• bill an agreed late charge as a line item on a new invoice, with the calculation in the description

Work out the amount with the late fee calculator first. For reminder wording and next steps, see overdue invoice interest, payment reminder etiquette, how to handle unpaid invoices and the late payment guide. More invoicing guides are on the InvoiceQuickly blog. Plans and limits are on the pricing page.

Frequently asked questions

What is the maximum late fee I can charge on an invoice?

There is no single US maximum. It depends on your contract, your state's interest and usury statutes, and whether the client is a business or a consumer. For example, New York's civil usury ceiling is 16% a year and Florida's usury line is 18% a year simple interest, but those are not late-fee allowances for every invoice.

Can I charge a late fee if it was not in the contract?

A fee your client never agreed to is hard to justify and may not be enforceable. Some states give a statutory interest rate when nothing was agreed: Texas allows 6% a year starting on the 30th day after the due date, and California applies 10% a year after breach of a contract entered into after January 1, 1986 that set no rate.

Is an 18% annual late fee legal?

It depends on the state, the client and whether it was agreed. 18% a year equals 1.5% a month as simple interest. In Florida, more than 18% a year simple interest is usury; in New York, the civil ceiling is 16%, although a corporate client cannot use the civil usury defense. Check your own state's statute.

Should I charge a flat late fee or interest?

A flat fee is simple to explain but must be reasonable relative to the likely cost of late payment, which is the test California applies to liquidated damages. Interest scales with the amount and the delay. Whichever you choose, agree it in writing first.

Do late fee laws for rent apply to invoices?

Not directly. Rent late fees are governed by landlord-tenant law, which is separate from the contract and interest rules for business invoices covered here. Rent is outside the scope of this guide.

Can I add a late fee to an invoice I already sent?

Issue a separate invoice or a statement for the late charge that references the original invoice number, the days late and the calculation. That keeps the original invoice unchanged and shows your client exactly how the charge was worked out.