Invoice Late Fee & Interest

Calculate late fees and interest on an overdue invoice (USD)

Step 1 · Invoice amount and dates

Invoice amount (USD) Unpaid balance that late charges apply to. Due date Date printed on the original invoice. Payment date The day funds actually arrive.

Step 2 · Interest, fees, and rounding

Annual interest % (APR) Nominal late interest per year, 0–200%. Interest type Match the method stated in your terms. Grace period (days) Days after due date before charges apply. Flat late fee (USD) Optional fixed fee once the invoice is late. Minimum interest charge (USD) Optional floor for the interest portion. Rounding step (cents) Round late charges to this step.

Late fee summary

Enter your details and tap “Calculate” · USD

We’ll work out days late after any grace period, calculate interest and flat fees in USD, show the total late charges, and give you a copy-ready line you can paste into an invoice.

Assumptions: Late days = max(0, floor(Paid − Due) − Grace). Simple interest uses daily rate APR/365. Compound modes use an effective daily rate rₑ = (1 + APR/m)^(m/365) − 1, where m is periods/year (12, 4, or 1). Interest = Principal × [(1 + rₑ)^days − 1] for compound, or Principal × (APR/365) × days for simple. Optional minimum interest and flat fee apply once late. Total due = Principal + interest + flat fee, rounded to your chosen cent step. All amounts are shown in USD.

Updated: September 23, 2025

Late fee calculator FAQs

Do partial days count for interest?

This tool counts whole calendar days between due date and payment date. If you want same-day payments treated as on time, use at least a one-day grace period so charges start after that buffer.

Which compounding method should I choose?

Match whatever your contract or invoice terms state. If nothing is specified, simple daily interest is often easiest to explain: a fraction of the annual rate applied per day on the overdue balance.

How do flat fees and minimums interact?

The calculator first computes interest, applies any minimum interest floor, then adds the flat late fee. Both are subject to your chosen rounding step so your line items stay tidy on the invoice.

Does this handle part-payments?

This page assumes one payment on the payment date. For staged payments, you can re-run the calculation for each partial principal and date, or approximate by using the remaining balance and latest payment date.

Do legal limits apply to my APR?

Many regions cap late payment interest and fees. This calculator does not fetch laws or contract terms; always confirm your APR, grace period, and fee structure with your own legal or accounting advisor.

How to use this invoice late fee & interest calculator

1. Turn policy into clear numbers

The calculator helps you move from “we charge interest on late invoices” to an exact amount in USD you can put on the bill. You enter the original invoice amount, due date, the day money actually lands, an annual interest rate, grace days, and any flat late fee or minimum interest charge. The tool counts chargeable late days, applies either simple daily interest or a compounding schedule, and shows total late charges plus a new total due.

2. Simple vs. compound interest

Simple daily interest multiplies the overdue balance by a daily fraction of the APR and the number of late days. It’s straightforward to check and easy to explain to clients. If your contract specifies compounding—monthly, quarterly, or annually—the calculator converts that nominal APR into an effective daily rate and compounds across the late days. That mirrors how banks quote nominal versus effective rates while still giving you a single daily rate for the late period.

3. Use grace periods to stay reasonable

A short grace period stops you from penalizing someone who pays just after the due date. The tool subtracts grace days from the elapsed time so interest only starts when the invoice is truly late by your own definition. If you treat “payment initiated on due date” as on time, use the date funds arrive in your account for the payment field and adjust grace accordingly.

4. Flat fees and minimum charges for small invoices

On small balances, percentage interest can produce awkward pennies. An optional flat late fee and minimum interest let you avoid tiny amounts that cost more to discuss than to pay. You can also pick a rounding step—0.01, 0.05, or 0.10 USD— so the late charge lands on clean cent values that look deliberate on the invoice.

5. Communicate the line item clearly

When you tap “Copy summary”, the tool generates a compact late-fee breakdown: principal, days late after grace, APR, method, daily rate used, interest, flat fee, and total now due, all in USD. Paste this directly into an invoice line or email and adjust wording to match your tone. Being specific about how the number was calculated often reduces friction during collections.

6. Keep terms and local rules aligned

This page is educational and offline. It does not fetch statutes, contracts, or payment regulations. Make sure your APR, compounding method, grace days, and any flat fees match the terms your customer agreed to, and stay within any legal caps in your jurisdiction. When in doubt, ask a professional to review your policy once, then reuse the same settings here so every invoice is treated consistently.

How the late charge math is approximated

Let P be the principal (overdue amount), a the nominal APR (as a decimal), and d the number of chargeable late days after grace. For simple interest, daily rate is a/365 and interest i = P × (a/365) × d.

For compound interest with m periods per year (12 monthly, 4 quarterly, 1 annually), the effective daily rate is r = (1 + a/m)^m/365 − 1, and interest i = P × [(1 + r)^d − 1]. We then apply an optional minimum interest floor iₘᵢₙ and flat fee F whenever d > 0. Total due is P + max(i, iₘᵢₙ) + F, with the late-charge components rounded to your chosen cent step.