Late fee calculator

A late fee only works if it was agreed first

You cannot invent a late fee after an invoice goes unpaid and expect it to stick. To have any force, it normally has to be in the contract or the terms the client accepted before the work started, stated as a rate rather than a vague threat, and then applied consistently.

Quote it the way lenders do: a percentage per month or per year, prorated by days overdue. That is what this calculator does — an annual rate divided by 365 and multiplied by the days past due. A specific, checkable figure is far harder to argue with than a round "$50 late fee" nobody can trace back to anything.

Put the terms on every invoice too, not only in the contract. One line under the payment instructions is enough: "Overdue invoices accrue interest at 1% per month from the due date."

Wording you can adapt

A short clause, for your contract or your standard terms. It is a starting point written by a freelancer for freelancers, not legal advice, and it should be checked against the rules where you and your client are based:

"Payment is due within 14 days of the invoice date. Invoices not paid by the due date accrue interest at 1% per month (12% per year), calculated daily from the due date until payment is received. Work on outstanding projects may be paused while an invoice is overdue. The client remains responsible for reasonable costs of recovering an unpaid invoice."

The pause clause is often the part that actually gets you paid. Interest is a background cost to a client; a stopped project has a person attached to it who wants it moving again.

Chase before you charge

Most late payments are administrative. The invoice went to the wrong address, it is missing a PO number, the person who approves it was on leave, or their payment run is on the 25th and nobody told you. Charging interest for a filing error is a fast way to lose an otherwise good client.

A sequence that works: a friendly note three days before the due date, a plain reminder on the day, a firmer one at seven days that states the balance and the late fee terms, and a phone call at fourteen. Ask the accounts payable contact directly whether the invoice is approved and which payment run it is in — that single question resolves a surprising share of them.

By the time you are actually applying interest, you are managing a debt rather than a relationship. Decide which one you are in before you send the number.

When to waive it

Waiving a fee you have already calculated is a genuinely useful move: it shows the amount was real, that you tracked it, and that you chose to drop it. "The accrued interest is $47.34 — I will waive it if the balance is settled this week" gives a client a reason to act now and a face-saving way to do it.

What does not work is never mentioning it. A late fee that is in your terms and never applied teaches every client that your due dates are decorative.