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Calculate how much you're owed in interest and penalties on unpaid invoices. Get an instant breakdown of late fees by state.
Common rates: 12% (conservative), 18% (standard), 24% (aggressive). Check your contract or state law for applicable rates.
When a client misses a payment deadline, you have the right to charge interest and late fees on the outstanding balance. But how much can you actually charge? The answer depends on your contract terms, your state’s usury laws, and the original invoice amount.
Most freelancers and small businesses undercharge on late fees — or don’t charge them at all — because they don’t know what’s legally allowed. This calculator gives you an instant breakdown of what you’re owed based on the principal amount, days overdue, and applicable interest rate.
Late fees serve two purposes: they compensate you for the time value of money you should have already received, and they incentivize timely payment on future invoices. Including clear late fee terms in your contracts makes collection significantly easier.
The calculator uses simple interest: Principal × Annual Rate × (Days Overdue ÷ 365). This is the most common method for business invoice interest. Some jurisdictions allow compound interest, which would yield a higher amount.
The daily rate shown in the breakdown tells you how much the debt grows each day — useful context when negotiating payment with a delinquent client.
California
Maximum interest rate of 10% per year on contracts that don’t specify a rate (Civil Code §1916-1). Contracts can specify up to 10% unless exempt.
Texas
No usury cap for commercial transactions. Consumer transactions capped at 18% (Finance Code §302.001). Always specify the rate in your contract.
New York
Civil usury cap of 16% per year (General Obligations Law §5-501). Criminal usury above 25%. Commercial loans over $250K may be exempt.
Florida
18% per year for amounts under $500K, 25% for amounts over $500K (Statute §687.02). Contracts should specify the rate.
Illinois
9% per year statutory rate for contracts without a specified rate (815 ILCS 205/2). Can be higher if contractually agreed.
It depends on your state and contract. Most states allow 1-2% per month (12-24% annually) when specified in a contract. Without a contract rate, state statutory rates apply, typically 6-18% annually.
Start counting from the day after the payment due date specified in your invoice. Industry standard is Net 30 (due 30 days after invoice). Your contract should clearly state the due date and when late fees begin accruing.
Yes. Courts are much more likely to enforce late fees that were agreed to in advance. Without contractual terms, you may be limited to your state’s statutory interest rate, which is often lower than commercial rates.
You can charge your state’s statutory interest rate on overdue amounts even without a contract. However, enforcing higher rates without a written agreement is difficult. This is why demand letters reference the applicable rate.
A late fee is typically a flat charge (e.g., $25 or 5% of the invoice) applied once when payment is overdue. Interest is an ongoing percentage that accrues daily on the unpaid balance. Many businesses use both: a late fee plus accruing interest.
Yes. A formal demand letter is often required before taking legal action, and it signals to the debtor that you are serious about collecting. Many unpaid invoices are resolved after a single demand letter without needing to go to court.
This tool provides general information, not legal advice. Laws vary by jurisdiction and individual circumstances. Consult a qualified attorney for advice specific to your situation.