Late fee calculator for invoices
A late fee on an invoice is whatever your terms say. The usual forms are a percentage per month (1.5% a month is 18% a year), a percentage per year, or a flat fee. By day, the fee is amount x yearly rate x days late / 365. This calculator turns any of them into the amount owed.
Calculator
The terms and the first row are the worked example further down. Replace them with your own terms and invoices. Nothing you type leaves your browser.
Your terms
Your invoices
| Amount outstanding | Due date | Date paid, or calculate to | Remove |
|---|
Result
How to work out a late fee by hand
- Read your terms. Note the rate and whether it is per month or per year, any flat fee, any grace period, and whether the percentage is counted by day or for each month started.
- Count the days late, from the day after the due date up to and including the day of payment. If that is no more than the grace period, there is no fee.
- For a fee counted by day, turn a monthly rate into a yearly one by multiplying by 12. A rate of 1.5% a month is 18% a year, and 2% a month is 24% a year.
- Still by day: multiply the amount owed by the yearly rate and by the days late, then divide by 365.
- For a fee charged for each month started, count the months instead. The first month runs to the same day of the next month, and one more day starts the second month. Multiply the amount owed by the monthly rate and by the months started. A yearly rate divided by 12 gives the monthly rate.
- Add the flat fee if your terms have one: once for the invoice, or once for each month started.
- Round the percentage fee to cents and add the two figures. That is the late fee for the invoice.
A month ends on the same day number as the due date. Where the next month is too short, it ends on that month's last day: an invoice due on 31 January 2026 finishes its first month on 28 February 2026.
A worked example
The terms say 2% per month on overdue amounts, counted by day, plus a flat fee of $50 for each late invoice. An invoice for $5,000 was due on 31 July 2026 and was paid on 31 October 2026.
- Days late: 31 in August, 30 in September and 31 in October, which is 92 days.
- Yearly rate: 2% x 12 = 24%.
- Percentage fee: 5,000 x 0.24 x 92 / 365 = 302.4658, which rounds to $302.47.
- Flat fee: $50, once.
- Late fee for the invoice: $302.47 + $50.00 = $352.47.
These are the figures the calculator shows when the page opens.
By day or per started month: the difference
The same rate gives two different fees depending on how your terms count time. Take an invoice for $2,000 due on 1 September 2026 and paid on 10 November 2026, with a fee of 1.5% per month.
| Method | Time counted | Sum | Late fee |
|---|---|---|---|
| By day, pro rata | 70 days at 18% a year | 2,000 x 0.18 x 70 / 365 | $69.04 |
| For each month started | 3 months at 1.5% a month | 2,000 x 0.015 x 3 | $90.00 |
The first month ran to 1 October and the second to 1 November. The payment on 10 November fell nine days into the third month, and the per started month method charges that month in full. That is the $20.96 difference.
The boundary is sharp. With this invoice, a payment on 1 October is one month started and a payment on 2 October is two. Use the method your terms describe. If they do not say, the calculator cannot choose for you.
Limits
- The calculator applies the terms you enter. It does not know any country's or state's legal cap on late fees, and it does not check your figures against one.
- Whether you can charge a fee at all depends on your contract and the law where you and your customer are.
- In the UK, Ireland and the EU a business may have a statutory right to interest on a late business invoice even with no contract term. That is a different sum with its own rate. Use the UK late payment interest calculator or the Ireland late payment interest calculator for it, and read the official pages listed at the end.
- The fee is simple, not compound. It is worked out on the invoice amount only, never on earlier fees.
- Each row is treated as unpaid for the whole period. If the customer paid in parts, enter each part as its own row with the date it was paid.
- Once the grace period has passed, days and months are counted from the due date. If your terms count from the end of the grace period, add the grace days to the due date and leave the grace field empty.
- The by day method divides by 365 in every year.
- The currency symbol is for display. Nothing is converted.
This is information, not legal advice. Ask a solicitor or attorney if the amount is large or the customer disputes it.
If your invoices are in Xero
Atesen Software, which publishes this guide, makes Lateby. It reads a Xero sales invoice export, works out the interest on every late invoice at the UK rate or at your own rate, and builds a Xero import file with one draft interest invoice per customer. It runs in your browser, the file is not uploaded and there is no Xero login. This calculator works without it.
Lateby takes your own rate per year or per month and counts by day. It treats a monthly rate as 12 times that rate a year, so a 1.5% monthly fee is 18% a year in Lateby. It also has a grace period and a fixed fee per invoice.
The free plan works out interest for every customer and makes the import file and notices for the first three customers in each batch. The Practice plan covers every customer and any number of Xero organisations for US$19 a month or US$190 a year. FOUNDING40 takes 40% off the first payment until 30 November, and you can get a full refund within 14 days. Details on the Lateby site.
Comparing tools for late payers? See software for managing overdue invoices in Xero.
To do it by hand in Xero, read how to calculate late payment interest in Xero and import it as draft invoices, or how to charge interest on overdue invoices in Xero.
Ways to work this out
| Way | What it is | Use it for |
|---|---|---|
| By hand | The seven steps above with a calendar and a calculator. | One invoice, or checking another tool. |
| A spreadsheet formula | =amount*rate*days/365, with the yearly rate as a decimal (0.18 for 18%) and the days as the paid date minus the due date. It covers the by day method. Months started, grace days and flat fees need formulas of their own. | A list you already keep in a sheet. |
| This page | Takes a rate per month or per year, by day or for each month started, a flat fee and a grace period. Several invoices at once, with a CSV copy. Runs in your browser. | A few invoices under the same terms. |
| Lateby | Reads a Xero sales invoice export and builds one draft interest invoice per customer, at your own rate counted by day. | Every overdue invoice in Xero at once. |
Questions people ask
How do I calculate a late fee on an invoice?
Use the rate in your terms. Counted by day, the fee is the amount owed x the yearly rate x the days late / 365, and a monthly rate is multiplied by 12 first. For $2,000 that is 70 days late at 1.5% a month: 2,000 x 0.18 x 70 / 365 = $69.04. Add the flat fee if your terms have one.
What is 1.5% per month as a yearly rate?
18% a year as simple interest, because 1.5 x 12 = 18. On $1,000 that is $180 for a full year, or about 49 cents a day. This page does not compound: the fee is always worked out on the invoice amount.
Is a late fee the same as interest?
Not always. People use "late fee" for a flat charge and also for a percentage that grows with time, and the second kind is interest. Your terms may have one, the other or both. The calculator shows the percentage fee and the flat fee as separate figures.
Can I charge a late fee that is not in my terms?
This page cannot answer that for your case. It depends on your contract and the law where you and your customer are. In the UK, Ireland and the EU a business may have a statutory right to interest on a late business invoice with no contract term: GOV.UK says you can claim interest and debt recovery costs if another business is late paying, and the EU's Your Europe page says the statutory rate applies where the contract sets none. For those sums use the UK calculator or the Ireland calculator. This is information, not legal advice.
Is there a legal limit on late fees?
It depends on where you and the customer are. This page does not list limits and applies whatever you enter. Check the official guidance for your country: GOV.UK for the UK, the Department of Enterprise, Tourism and Employment for Ireland and Your Europe for the EU. This is information, not legal advice.
Sources, checked on 14 November 2026: GOV.UK: late commercial payments, charging interest and debt recovery, Department of Enterprise, Tourism and Employment: late payments and Your Europe: late payment. They describe statutory interest between businesses, which this page does not calculate. The Lateby details come from the Lateby site, read on the same day. Atesen Software is independent and not affiliated with Xero. Xero is a trademark of Xero Limited. Questions: support@atesensoftware.com.