Late Payment Interest Calculator
When a bill or invoice goes past due, the balance usually grows two ways: a one-time late fee and a monthly finance charge that accrues with the days. Enter the terms to see the updated total.
Your numbers
Result
- Interest
- $15.00
- Late fee
- $0.00
- Original amount
- $1,000.00
| Item | Amount |
|---|---|
| Original amount | $1,000.00 |
| Late fee | $0.00 |
| Interest (1.5%/month ≈ 18.0%/year) | $15.00 |
| Total due | $1,015.00 |
How late payment interest is calculated
The common structure is a flat late fee (a fixed dollar amount, if the contract sets one) plus a monthly interest rate — the finance charge — prorated by the days overdue: interest = amount × monthly rate × days ÷ 30. A typical invoice finance charge is 1% to 1.5% per month, which is 12-18% per year. The total due is amount + late fee + interest.
What the contract and state law allow
Late fees and interest must come from the agreement — an invoice can only charge what its payment terms state, and many US states cap interest under usury laws (limits vary by state and by whether it's consumer or business debt). Credit cards, rent and taxes each follow their own rules. Always check the contract language, e.g. "1.5% per month on overdue balances".
What this calculation simplifies
It uses simple interest prorated by day, the most common convention for invoices and bills — not compounding month over month. It also leaves out collection costs and attorney fees that some contracts add. If you invoice clients, state your late terms clearly up front and send the first reminder before charging anything.
Informational and educational result. Not a substitute for professional advice.
Frequently asked questions
Sources
- Invoice payment terms and finance charges — common US practice
Embed this calculator
Copy the code and paste it into your site or blog. Credit with a link back to Contania is included, and the height adjusts itself.
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