Calculation details
Planning estimate only. Platform fees, taxes, payment costs, and policies can change; verify current terms before pricing.
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Use this result
Share the current inputs or ask ChatGPT to explain the calculation in context.
What does this calculator estimate?
A $1,000 invoice 30 days late at 1.5 percent monthly accrues $15.00 in simple late fees. Simple: fee = balance x monthly rate x (days late / 30.4).
- Simple late fee = balance x monthly rate x (days late / 30.4).
- Compound late fees accrue on prior fees as well as the balance.
- State law caps late fees and interest rates on most invoices.
How late fees work
Late fees compensate for delayed payment and discourage slow payers. Most invoices charge a monthly rate on the overdue balance — 1.5% monthly (18% annual) is common. The calculator computes the fee for simple or compounding terms.
Limitations to watch for
Late fee limits vary by state (many cap at 5–10% or require the rate in the contract). The tool assumes the invoice states the rate and grace period. Compounding fees must be written into the terms to be enforceable.
How to use it in practice
State the rate and grace period on the invoice before it's late. Enter the overdue balance and days to compute the fee. Send a reminder with the exact figure — clarity collects faster.
['Enter the overdue balance.', 'Enter the monthly rate and days late.', 'Choose simple or compound; read the fee.']
How this calculator works
Formula
Simple: fee = balance × monthly rate × (days late ÷ 30.4). Compound: balance × ((1 + monthly rate)^months − 1). Months = days ÷ 30.437 (average).
Worked example
A $1,000 invoice 30 days late at 1.5% monthly: $1,000 × 1.5% = $15.00 in late fees.
Assumptions to verify
- The rate is stated in the invoice terms.
- Days convert to months at 30.4 average days.
- Local law permits the charged rate.
Frequently asked questions
How do I calculate a late fee?
Balance × monthly rate × months late: $1,000 × 1.5% × 1 = $15 for 30 days.
What is a standard late fee rate?
1.5% monthly (18% annually) is common; many states cap fees or require them in the contract.
Is a late fee legal?
Yes, if the rate is in the agreement and within state limits — check your jurisdiction.
What's the difference between simple and compound?
Simple charges on the original balance; compound charges on the balance plus accumulated fees. Compound must be in the terms.
How do I convert days to months?
Divide by 30.4 (the average month length) — the tool does this automatically.
Should I charge interest on late payments?
It's standard practice for B2B — it compensates for the financing you're providing and speeds collections.
What if the client disputes?
The written terms decide. Make the rate prominent on the invoice.
Cite this tool
BoringToolsKit. “Invoice Late Fee Calculator.” boringtoolskit.com/invoice-late-fee-calculator/ (reviewed 2026-08-25). Free to reference in articles, syllabi, and answer posts with a link.
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