Free late fee calculator
Use this free late fee calculator to work out interest or a flat fee on an overdue invoice, from the due date to today, with the working shown.
Need the words to go with it? Try the late payment email writer.
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Tell us who you are and the tool opens straight away, along with every other free tool and template on this device. We'll email you when we add new ones.
How it works
From the due date to the day they pay, minus any grace period.
Interest by the day at your rate, or one flat fee.
Send an updated invoice or a separate one for the fee, with the working.
The maths
days late = paid date − due datedays charged = days late − grace period (not below 0)yearly rate = monthly rate × 12interest = amount × yearly rate × days charged ÷ 365late fee = interest + fixed admin fee(or the flat fee on its own)
This is simple interest: it is charged on the unpaid amount only, not on earlier interest.
How to use this free late fee calculator
Put in the unpaid amount, the date the invoice was due and the date it was paid (or leave it as today). Then choose how your terms charge for late payment: interest as a percentage a month or a year, or a flat fee. The late fee calculator shows the fee, the new total and how much each extra day adds, with the working you can paste into a reminder.
A worked example
An agency sends a 1,200 invoice due on 1 March. The terms say 1.5% a month on late payments, with no grace period. The client pays on 31 March, 30 days late.
- Yearly rate: 1.5% × 12 = 18%.
- Interest: 1,200 × 18% × 30 ÷ 365 = 17.75.
- Total now due: 1,217.75. Each extra day adds about 0.59.
Setting a late fee policy that works
- Write it down before the work starts. Put the rate and when it applies in your quote, contract and invoice footer. For example: "Invoices are due within 14 days. Late payments are charged interest at 1.5% a month."
- Keep it reasonable. A fee that looks like a penalty is harder to enforce and sours the relationship. Many places cap what you can charge, so check the rules where you trade.
- Remind before you charge. A friendly note a few days before the due date prevents most late payments. Our payment reminder generator writes one for you.
- Make paying easy. A payment link on the invoice removes the excuse of "I'll do the bank transfer later".
Common mistakes
- Adding a fee that isn't in your terms. Clients can refuse to pay it, and they'll remember.
- Charging interest on interest. Unless your contract says so, charge interest on the unpaid invoice only.
- Waiting months to ask. The longer an invoice goes unpaid, the less likely it is to be paid at all. Follow up in the first week.
In startbuddi, each invoice shows whether it has been viewed and paid, so you know who to follow up with. See invoicing in startbuddi.
Questions
What is a normal late fee on an invoice?
Many small businesses charge 1% to 2% a month on the unpaid amount, or a small flat fee on smaller invoices. Whatever you choose, it has to be reasonable and written into your terms before the work starts.
Can I charge a late fee if it was not in my terms?
Usually not, unless the law where you trade gives you a right to one. Put your late fee in your quote, contract and on every invoice, so the client agrees to it before the invoice is due.
How is late payment interest worked out?
This calculator uses simple interest by the day: the unpaid amount × the yearly rate × the days charged ÷ 365. A monthly rate is turned into a yearly one first, so 1.5% a month is 18% a year.
What is statutory late payment interest in the UK?
For business-to-business invoices, UK law lets you claim interest at 8% a year plus the Bank of England base rate, and fixed compensation of £40 (debts under £1,000), £70 (£1,000 to £9,999.99) or £100 (£10,000 or more). Choose "% a year", add 8 to the current base rate and put the compensation in the admin fee box.
Does the grace period count towards the interest?
Not here. Interest is charged only for the days after the grace period ends. If your terms charge from the due date once the grace period is over, set the grace period to 0.
Should I always charge the late fee?
You don't have to. Many businesses waive it the first time for a good client who pays quickly after a reminder. Having it in your terms is what makes clients pay on time.
Related free tools
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In startbuddi, your quotes, invoices and client records sit together, so you can see who has paid and who needs a nudge.
