Invoice Late Fee Calculator
Calculate late fees on overdue invoices and see how much money is sitting in unpaid customer balances. Knowing the number helps you enforce your payment terms.
Industry standard: 1.5% per month (18% annual)
Days after payment was due
How many invoices are currently overdue at similar amounts
Fee Breakdown
With 5 overdue invoices at $2,500 each, 30 days past due at 1.5% monthly, you are owed $12,687.50 total ($187.50 in fees alone). Automated reminders recover 40-60% of overdue invoices before fees are even needed.
Frequently Asked Questions
Can contractors legally charge late fees on invoices?
Yes, in all 50 US states, as long as the late fee terms are disclosed in writing before the work begins. Include late fee terms on your estimate/contract AND on the invoice itself. Most states cap late fees at 1-2% per month (12-24% annually). Some states like California cap at 10% annual interest unless a higher rate is agreed upon in writing. Check your state regulations, but the short answer is: yes, if you tell the customer upfront.
What is a fair late fee for contractors?
Industry standard is 1.5% per month (18% annually) applied after a 15-30 day grace period. This is high enough to motivate timely payment without being excessive. Example: a $1,000 invoice 30 days overdue with 1.5% monthly fee = $15 late charge. Some contractors use flat fees instead: $25-$50 per occurrence. Either approach works, just be consistent and disclose it upfront.
How do I add late fees to my invoices?
Add a line item on every invoice that states your late fee policy: "A late fee of 1.5% per month will be applied to balances not paid within 30 days." Business Genie automatically adds this language and can calculate and apply late fees when invoices become overdue. The key is making it visible on EVERY invoice and estimate, not buried in fine print.
Do late fees actually help contractors get paid faster?
Yes. Contractors who clearly state late fee policies on invoices get paid an average of 8-14 days faster. The fee itself is less important than the signal it sends: this business takes payments seriously. Combined with automated payment reminders (which Business Genie sends automatically), most contractors reduce overdue invoices by 40-60%.
Get paid faster with automated reminders
Business Genie sends payment reminders and accepts online payments. Reduce overdue invoices by 60%.
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