Invoice late fee calculator
LATE FEE CALCULATION
Original invoice: $0.00
Late fee applied: $40.00
New total due: $40.00
📋 INVOICE WORDING (copy-paste ready)
A late payment fee of USD40.00 has been applied to this invoice, which was due 0 days ago. New total due: USD40.00.
Add fee terms once, then automate reminders so clients act before extra charges stack up.
Start free trialHow to calculate a late fee on an invoice
Fixed fee is simple and predictable. Monthly percentage scales better for larger invoices. UK statutory interest can be legally enforceable for B2B invoices under the Late Payment Act.
What late fee rate is standard
- US: no federal statutory rate; 1–2% monthly is common (state law applies).
- UK: Bank of England base rate + 8% statutory for qualifying B2B debts.
- EU: Late Payment Directive sets 8% above ECB reference for B2B.
- Australia: penalty interest often defined by state-level frameworks.
Late fees by US state: what actually applies
Searches like "Illinois late fee calculator" or "New York late fee calculator" usually assume each state publishes one maximum rate. For business-to-business invoices, that is rarely how it works. Three rules cover most situations:
- Your contract controls. A late fee you both agreed to in writing, at a reasonable rate, is generally enforceable in most states.
- Usury caps mostly target loans, not late fees on invoices for delivered work — but an extreme fee can still be challenged as a penalty.
- Different rules for consumers and government work. Consumer-protection laws may cap fees charged to individuals, and state prompt-payment acts set interest for public contracts.
| State | Single statutory cap for B2B invoice late fees? | What to check |
|---|---|---|
| New York | No single cap for agreed B2B fees | Reasonableness of the rate; consumer rules if billing individuals |
| Illinois | No single cap for agreed B2B fees | Contract wording; Illinois prompt-payment rules for public work |
| Pennsylvania | No single cap for agreed B2B fees | Contract wording; separate rules for consumer and public contracts |
| Wisconsin | No single cap for agreed B2B fees | Consumer Act limits if billing individuals; contract wording for B2B |
Confirm before you charge: state law changes and the details above are general guidance, not legal advice. Check your state's current statutes or ask a local attorney, then put the agreed fee in your payment terms using proper invoice late fee wording.
Does charging a late fee damage client relationships?
It can if it is a surprise. If agreed up front in clear payment terms, it is usually treated as professional policy rather than personal conflict.
Set terms first with the Payment Terms Generator, then estimate exposure in the Late Payment Cost Calculator.
External references
- UK Late Payment of Commercial Debts Act 1998
- EU Late Payment Directive 2011/7/EU
- US SBA: Getting paid on time resources
Written by Pasko Djonovic, Founder at ChaseAI • Last updated May 6, 2026
