Invoice late fee calculator for several overdue invoices

Multiply the open balance by your rate and by how long the invoice is late. The four common ways:

• Flat fee: the same amount on every late invoice.
• Percent once: balance × percent.
• Percent a month: balance × monthly rate × 12 × days late ÷ 365.
• Yearly rate: balance × yearly rate × days late ÷ 365.

Some terms charge a full month for “each month or part of a month” instead of by the day. Tick that box in step 2 to match.

Example: a 2,400-dollar invoice, 32 days late, at 1.5% a month. 2,400 × 0.015 × 12 × 32 ÷ 365 = 37.87 dollars. Counted by month or part of a month, it is two months: 72 dollars.

Charge what your signed terms say, within the limits of your state. State rules vary, so check yours before you set a rate.

The Per year column shows what each fee works out to as a yearly rate, so you can compare it with a limit:

Per year = fee ÷ balance × 365 ÷ days late

Example: a 25-dollar flat fee on a 300-dollar invoice paid 10 days late. 25 ÷ 300 × 365 ÷ 10 = 304% per year. A minimum or cap per invoice keeps small invoices in line.

Under the Prompt Payment Act, a federal agency that pays you late owes interest at the Treasury rate. The rate is 4.75% per year for July 1 to December 31, 2026. It was 4.125% for January 1 to June 30, 2026, and 4.625% for all of 2025.

The rules in 5 CFR 1315.10:

• Interest runs from the day after the due date to the payment date.
• The rate in effect on the day after the due date applies to the whole period.
• Unpaid interest is added to the balance every 30 days, for up to one year.
• It uses a 360-day year.
• Interest under 1 dollar need not be paid.

Formula: balance × (1 + rate × 30 ÷ 360) for each full 30 days × (1 + rate × leftover days ÷ 360), minus the balance.

Example: 10,000 dollars, 45 days late, due in October 2026. One 30-day period and 15 leftover days at 4.75% = 59.45 dollars.

Put one plain sentence on every invoice and in your contract, before the work starts. Step 4 writes it from your settings.

Example: “Balances unpaid 10 days after the due date are charged interest of 1.5% a month (18% per year) from the due date until paid.”

• QuickBooks Online: Settings > Account and settings > Sales > Late fees. Enter an amount, a percent or both, how often, and grace days.
• FreshBooks: a one-time late fee, as a percent of the invoice, a percent of the balance, or a flat amount.
• Any software: add the fee as a line on the invoice or as a separate invoice.

QuickBooks Online starts applying late fees the day after you turn the setting on. For an invoice that was already overdue, add the fee as a line item. To decide who to chase first, use the AR aging chase list or read our field guide on chasing overdue invoices in QuickBooks Online.