How to use the late fee and interest calculator
- Enter the amount due and the due date, then the date paid. Use today’s date if the invoice is still unpaid and you want to see the charge so far.
- Set the grace period, the number of days after the due date before any late charge starts.
- Fill in the late terms that apply: a flat fee, a one-time percent, a yearly interest rate for daily interest, or a monthly late rate. Leave the others at 0.
- Read the late charges, the amount plus charges, and the table that shows what each method adds.
Formula
days late = max(0, days past due date - grace days)
daily interest = amount x yearly rate / 365 x days late
monthly charge = amount x monthly rate x ceil(days late / 30)
late charges = flat fee + amount x one-time percent + daily interest + monthly charge
A flat fee and a one-time percent are charged once if the payment is late at all. Interest here is simple, not compounded. The monthly rate is charged for every started period of 30 days.
An invoice paid 45 days after it was due
An invoice for $5,000 was due on March 1, 2026 and paid on April 15, 2026. That is 45 days past the due date. With a grace period of 5 days, 40 days are late. The flat fee is $25 and the yearly interest rate is 18 percent.
Daily interest is $5,000 x 0.18 / 365 x 40 = $98.63. Add the $25 flat fee to get late charges of $123.63, so the total to pay is $5,123.63. Switching to a monthly late rate of 1.5 percent on $8,000, paid 59 days late, charges two 30-day periods: $8,000 x 0.015 x 2 = $240.00.
Choosing between the four methods
A flat fee is easy to explain and does not grow, so it suits small invoices. A percent of the amount grows with the invoice but not with time. Daily interest grows the longer the invoice sits unpaid, which is closer to the cost of waiting. A monthly rate works in steps, so a payment one day late and one 30 days late can cost the same.
Many businesses combine a small flat fee with interest. Whatever you pick should be written on the invoice or in the contract before the work is done, because a charge the customer never agreed to is hard to collect.
Where this page stops
Some places limit late charges, require a notice, or treat them differently for consumers and businesses. This page does not know your location or your contract. It only does the arithmetic on the terms you type, so check the rules that apply to you before billing. To write the reminder itself, use the Payment Reminder Generator. To find the due date from terms such as Net 30, use the Payment Terms Due Date Calculator.
Assumptions and limits
- Interest is simple daily interest on a 365 day year and is not compounded.
- The grace period is counted in calendar days after the due date.
- A payment on or before the due date, or inside the grace period, is charged nothing.
- The flat fee and one-time percent are charged once, and only if the payment is late.
- All rates, fees and the grace period shown when the page opens are examples, not recommended terms.
Frequently asked questions
Does the day of the due date count as late?
No. The count starts the day after the due date. A payment made on the due date is zero days past due, so nothing is charged.
What is the difference between 1.5 percent a month and 18 percent a year?
The numbers are close, but this page treats them differently. A yearly rate is spread over every day late, while a monthly rate is charged in whole 30 day steps. A payment 5 days late costs a little under 0.25 percent at 18 percent a year and a full 1.5 percent at 1.5 percent a month.
Can I add the late charges to the invoice amount?
The page shows the amount plus charges, so you can see the new total. Whether you may bill that amount depends on your contract, so keep the original invoice and send a separate note for the charges.
Why does the page show zero for a payment inside the grace period?
A grace period is a window where no late charge applies. If the payment lands inside it, the days late are zero and every method adds nothing.