Late Fee Calculator
Enter the overdue amount, the days it is late and your annual interest rate. The calculator returns the late fee as simple interest (amount x rate x days / 365) and the new total owed. It does not tell you what rate you are allowed to charge: your contract and local law decide that, and the UK, EU and US rules are summarised below.
Best for: Freelancers and businesses with an overdue invoice who need to work out the interest their terms or the law allow before adding it to a follow-up invoice.
Calculation Results
Simple interest at 12% a year (0.0329% a day, $0.33 a day) for 30 days.
How the late fee formula works, with a dated example
The calculator uses one formula: Late fee = invoice amount x (annual rate / 100) x days overdue / 365. Interest is charged on the original amount only, so it never compounds, and a 366-day year is not used even in a leap year.
Worked example: a $2,400 invoice was due on 1 July 2026 and paid on 15 August 2026, which is 45 days late. At 18% a year the fee is 2,400 x 0.18 x 45 / 365 = $53.26, so the client owes $2,453.26. Each extra day adds $1.18.
The rate drives the result more than anything else. Here is the same $2,400 invoice, 45 days late, at different annual rates:
| Annual rate | Daily rate | Fee for 45 days | Where the rate comes from |
|---|---|---|---|
| 8% | 0.0219% | $23.67 | Example contract rate |
| 11.75% | 0.0322% | £34.77 (if billed in GBP) | UK statutory rate for interest starting in 2026 |
| 12% | 0.0329% | $35.51 | 1% a month, as simple interest |
| 18% | 0.0493% | $53.26 | 1.5% a month, as simple interest |
UK statutory interest under the Late Payment Act
For business-to-business debts, the Late Payment of Commercial Debts (Interest) Act 1998 lets you claim interest at 8% plus the Bank of England base rate. You cannot claim it if your contract sets a different rate. The base rate that counts is the one in force on 30 June (for interest that starts running from 1 July to 31 December) or 31 December (for interest starting from 1 January to 30 June), under SI 2002/1675.
The Bank of England Bank Rate has been 3.75% since 18 December 2025 (checked 27 October 2026), so it was 3.75% on both 31 December 2025 and 30 June 2026. That makes the statutory rate 11.75% for interest that starts running at any point in 2026. Enter 11.75 in the rate box. For interest starting in the first half of 2027, use the base rate in force on 31 December 2026 plus 8.
On top of interest, you can claim a fixed debt recovery sum once per late payment: £40 for debts up to £999.99, £70 for £1,000 to £9,999.99 and £100 for £10,000 or more. The calculator does not add this. Worked example: a £2,400 invoice paid 45 days late in 2026 carries £34.77 of statutory interest (about £0.77 a day) plus the £70 fixed sum, so £104.77 in total on top of the invoice.
EU and US late payment rules compared
European Union: Directive 2011/7/EU defines statutory late payment interest for commercial transactions as simple interest at the reference rate plus at least eight percentage points. In euro countries the reference rate is the European Central Bank's main refinancing rate; other member states use their own central bank's rate. It also gives creditors a fixed sum of at least €40 for recovery costs. Each country writes the directive into its own law, so check the rate your country publishes before you invoice.
United States: there is no single federal cap on late fees for business invoices. Limits come from state law (usury and late-charge rules) and from your contract, and they differ by state and by whether the client is a business or a consumer. Our article on late fee laws by state covers the variation; confirm the current rule for your state before you set a rate.
This is general information, not legal advice. Statutory rights in the UK and EU apply to business-to-business transactions, not to consumers. Check with the relevant authority or a solicitor or attorney for your situation. Last reviewed 27 October 2026.
Adding a late fee to an invoice
- Agree it first. Put the rate and when it starts in your contract and in the payment terms on every invoice. See our payment terms guide.
- Count from the due date, not the invoice date. An invoice dated 1 June on Net 30 is due 1 July.
- Show your working. Bill the fee as its own line ("Late payment interest: $2,400 at 18% a year for 45 days") so the client can check it.
- Remind before you charge. A clear reminder often gets the invoice paid without a fee. Our payment reminder templates give you gentle, firm and final wording.
InvoiceQuickly does not calculate or add late fees automatically. You can put your late payment terms in the invoice's terms field and bill any fee you are owed as a line item on a new invoice.
When this isn't the right fit
You have a client relationship worth keeping and the fee is small. A phone call usually gets an invoice paid faster than a $15 interest charge, and it costs you nothing.
Your client is a consumer. The UK and EU statutory schemes cover business-to-business debts only, and consumer protection rules can limit late charges. Get advice before you add a fee.
Your client is insolvent. Claim through the insolvency practitioner or administrator; working out interest will not change what you recover.
Frequently asked questions
How do you calculate interest on a late payment?
Multiply the overdue amount by the annual interest rate, divide by 365 and multiply by the number of days late. A $2,400 invoice paid 45 days late at 18% a year costs 2,400 x 0.18 x 45 / 365 = $53.26. This is simple interest, which is how this calculator and the UK and EU statutory schemes work.
How much can I charge for a late payment fee?
Whatever your contract allows, within the law where you and your client are. In the UK, business-to-business debts without an agreed rate can carry statutory interest of 8% plus the Bank of England base rate, which is 11.75% a year for interest that starts running in 2026. In the US, limits come from state law and differ from state to state, so there is no single national cap.
Can I charge a late fee if my contract does not mention one?
It depends on the country. UK and EU law give businesses a statutory right to interest and fixed compensation on late business-to-business payments even when the contract is silent. In the US there is no federal statutory interest on late payments between private businesses, so what you can charge depends on your agreement and state law. Put the rate in your contract and on the invoice before the work starts.
Is 1.5% per month the same as 18% a year?
Only as simple interest. 1.5% x 12 = 18%, and this calculator treats an 18% annual rate as 0.0493% a day. If your contract charges 1.5% for each month or part month, a 45-day delay counts as two months, so the fee would be 3% rather than 18% x 45 / 365 = 2.22%. Use the exact wording of your terms.
Does this calculator compound interest?
No. It charges interest on the original invoice amount only, never on interest already added. Doubling the days late doubles the fee. It also does not decide whether a rate is legal, add fixed compensation sums or write a notice for you.
Should I charge a late fee on a small invoice?
Do the arithmetic first. A $300 invoice 30 days late at 12% a year earns $2.96 in interest, which rarely justifies a dispute with a client you want to keep. A fixed-sum claim (such as the UK's £40 on debts under £1,000) or a firm reminder usually matters more on small amounts.
Related Tools & Resources
- All free invoicing tools: calculators and generators that run in your browser
- Late payment guide: handling an overdue invoice step by step
- Charging interest on overdue invoices: wording and policy examples
- Past due invoice template: a layout for re-billing with the fee shown
- Early payment discount calculator: the carrot to a late fee's stick
- Net 30 payment terms explained: when the clock starts