Invoice Late Fee Calculator

How to calculate invoice late fees?

Late fees are typically calculated based on a flat rate or a percentage of the principal amount for every period the payment is delayed.

Formula: Fee = Principal × (Rate / 100) × (Days / 365)

Using the Late Fee calculator: an example

If an invoice for $1,000 is 30 days overdue with a 5% monthly rate and a 5-day grace period.

Step-by-step calculation:

• Identify the net overdue days (30 - 5 = 25 days)
• Apply the monthly rate to the principal
• Calculate the pro-rated fee for the 25-day period

Frequently Asked Questions

What is a standard late fee?

Many businesses charge 1.5% to 2% monthly interest or a flat $25-$50 fee.

Are there legal limits on late fees?

Yes, usury laws vary by state and country, often capping annual interest rates between 10% and 18% for B2B transactions.