Free Tool
Late Payment Fee Calculator
Calculate exactly how much your client owes in late fees. Supports simple, monthly, and daily compounding with copy-paste contract clauses.
Enter an invoice amount and due date to calculate late fees
Common rates
1-1.5% per month is standard for freelancers. Check your local laws — some states cap late fees. Always specify the rate in your contract before charging.
Late Fee Wording for Your Contracts
Include one of these clauses in your contracts or invoices to set expectations upfront.
Standard Late Fee Clause
A late fee of 1.5% per month (18% annually) will be applied to all invoices not paid within the agreed payment terms. Late fees begin accruing the day after the due date.
Flat + Percentage Clause
Invoices not paid within 30 days of the due date will incur a $25 administrative fee plus interest of 1.5% per month on the outstanding balance until paid in full.
Simple Percentage Clause
Any payment received after the due date will be subject to a late payment fee calculated at a rate of 1.5% per month on the outstanding invoice amount.
Stop calculating late fees.
NudgeBill sends automated payment reminders BEFORE invoices go overdue, so you rarely need to charge late fees at all. Prevention beats collection.
Prevent Late PaymentsHow Late Payment Fees Work
Late payment fees compensate freelancers for the cost of delayed payment — including cash flow disruption, time spent chasing payments, and the opportunity cost of not having those funds available. They also incentivize clients to pay on time.
Simple interest is the most straightforward method. The fee is a flat percentage of the original invoice amount multiplied by the number of months (or fraction of months) overdue. For example, 1.5% per month on a $2,500 invoice that's 15 days late: $2,500 x 1.5% x (15/30) = $18.75.
Compound interest calculates fees on the growing balance (original amount + accrued fees). This is less common for freelancers but some contracts specify it. Monthly compounding recalculates each month, while daily compounding recalculates every day.
Legal considerations: Late fee rates must be reasonable and comply with local usury laws. In the US, most states allow up to 1.5% per month for commercial transactions. Always consult local regulations and include fee terms in your contract before work begins.