Interest and fees on one overdue invoice
Simple interest, which is how almost every set of freelance terms is written. Change the numbers; the results update as you type.
Whatever your contract says. If it says nothing, the answer is usually your local statutory rate, and usually lower than you would like.
- Interest accrued
- $35.51
- Total now owed
- $2,475.51
- Uplift on the original invoice
- 3.15%
The number that decides whether this is worth the conversation.
At the defaults — a $2,400 invoice, 45 days late, 12% a year, with a $40 fixed fee — the interest is $35.51, the total owed becomes $2,475.51, and the uplift on the original invoice is 3.15%.
Assumptions behind these numbers
- Simple interest, not compound. Compound interest on trade debt is unusual outside consumer credit and is unenforceable in several jurisdictions.
- A 365-day year. Some contracts use 360; the difference at these amounts is cents.
- Interest runs from the day after the due date, which is the default position in most jurisdictions but not all of them.
- This is arithmetic, not legal advice. What you may actually charge depends on your contract and your country.
Read the number honestly
Three percent is not why you charge it
Run any realistic set of freelance numbers through the calculator above and the uplift lands somewhere between two and six percent. On a $2,400 invoice that is a bit under $80 — less than an hour of most people's time, and considerably less than the emotional cost of the conversation about it.
Which raises the obvious question: why bother? Because the fee is not a revenue line, it is a deadline with a consequence attached. An invoice with no late fee has a due date that is a suggestion. An invoice with one has a due date that costs money to ignore, and the amount matters far less than the existence.
There is a second, quieter reason. A late fee in the terms gives you something factual to say in the two-week message that is not an accusation. Terms are net 14, so interest applies from today is a sentence about the contract. You still have not paid me is a sentence about the client. The first one is much easier to send, and much easier to receive.
What the uplift looks like across common cases
Computed with the same formula as the calculator, at a 12% annual rate with a $40 fixed fee.
| Invoice | 30 days late | 60 days late | 90 days late |
|---|---|---|---|
| $500 | $44.93 (9.0%) | $49.86 (10.0%) | $54.79 (11.0%) |
| $1,200 | $51.84 (4.3%) | $63.67 (5.3%) | $75.51 (6.3%) |
| $2,400 | $63.67 (2.7%) | $87.34 (3.6%) | $111.01 (4.6%) |
| $6,000 | $99.18 (1.7%) | $158.36 (2.6%) | $217.53 (3.6%) |
| $15,000 | $187.95 (1.3%) | $335.89 (2.2%) | $483.84 (3.2%) |
Source: Calculated from the formula above: interest = amount × 12% × days ÷ 365, plus a $40 fixed fee. Figures include the fee.
The pattern worth noticing: the fixed fee dominates on small invoices and disappears on large ones. If most of your work is over $5,000 a fixed fee is close to pointless and the rate is what matters.
Before you add one to your terms
- Will a late fee cost me the client?
- Occasionally, and usually the client it would be a relief to lose. The much more common outcome is nothing at all — a fee in the terms goes unremarked at signature and unnoticed until it is invoked. If a client argues about the clause during negotiation, that is a genuinely useful early signal about how they pay.
- Can I charge it if it was not in the contract?
- In many jurisdictions there is a statutory right to interest on commercial debt even without a clause, often at a rate tied to a central bank rate plus a margin, sometimes with a fixed recovery amount on top. It varies enough by country that anything specific said here would be wrong somewhere. Look up your own; the phrase to search is usually statutory interest on late commercial payment plus your country.
- Should I waive it if they finally pay?
- Usually yes, and say that you are doing it. A waived fee that is mentioned is a favour banked; a waived fee that is never mentioned is a lesson that the clause is decorative.
The message that mentions the fee
It is the fourth in the ladder, and it is the one people find hardest to write. There is a version of it in the templates.