Our Invoice Late Fee Calculator calculates the interest charges on overdue invoices. Whether you charge a flat late fee or daily/monthly interest, this tool gives you the exact amount to add to your invoice — in seconds.
Invoice Late Fee Calculator
Late Fee Formula
Interest = Invoice Amount × (Annual Rate / 100) × (Days Overdue / 365)
Total Due = Invoice Amount + Interest + Flat Fee
Example: Invoice of ₹50,000 overdue by 45 days at 18% p.a.:
Interest = 50,000 × 0.18 × (45/365) = ₹1,109.59
What Late Fee Rate Should You Charge?
| Country / Standard | Typical Late Fee Rate |
|---|---|
| India (commercial) | 12–24% p.a. |
| UK (Late Payment Act) | 8% above Bank of England base rate |
| USA (standard practice) | 1.5% per month (18% p.a.) |
| EU (Late Payment Directive) | 8% above ECB reference rate |
How to Add a Late Fee Clause to Your Invoice
Always state your late fee terms clearly on your invoice and in your contract before work begins. A typical clause reads:
“Payment is due within 30 days of invoice date. Invoices unpaid after 30 days will incur a late payment charge of 18% per annum (1.5% per month) calculated daily on the outstanding balance.”
FAQs
Can I legally charge late fees in India?
Yes. You can charge late fees if your contract or invoice states the rate clearly. There is no statutory cap on commercial late interest in India, though courts may reduce unreasonably high rates.
What is a reasonable late fee?
1–2% per month (12–24% annually) is standard in commercial practice. Anything above 3% per month may be considered excessive by courts.
How do I write a late payment reminder?
Keep it professional: state the original invoice number, due date, days overdue, original amount, late fee calculated, and the new total. Give a firm new deadline.
How is invoice late fee interest calculated?
Interest = Invoice Amount × (Annual Rate ÷ 100) × (Days Overdue ÷ 365). Add any flat late fee to get the total amount due.