Free tool
Late fee & payment terms calculator
What overdue invoices cost — and earn.
Your result is an estimate based on the answers you enter. It is not filed or stored anywhere.
Method
How this calculator works
Standard freelance practice is a late fee of 1–1.5% per month on overdue balances, prorated daily — enforceable only if your contract and invoice state it before the work. This tool shows the fee at your rate and days overdue.
It also evaluates early-payment discounts. "2/10 net 30" — 2% off if paid in 10 days instead of 30 — sounds small but is equivalent to a ~37% annualized rate you're paying for 20 days of earlier cash. The tool annualizes any discount terms so you can compare against your real cost of money.
Estimates, not advice
Every figure this tool produces is a planning estimate built from the numbers you enter and simplified assumptions documented above. It is educational content, not individualized financial, legal, or tax advice. Rates, limits, and thresholds change — annual constants are reviewed each January, and you should confirm anything decision-critical against primary sources or a professional.
Questions
FAQ
Are late fees legal?
Generally yes when contracted in advance; a few states cap interest rates on consumer transactions. Business-to-business terms at 1–1.5%/month are standard practice — see the legal guide for state caveats.
Do late fees actually work?
Mostly as a deterrent and negotiation anchor. The bigger levers are deposits and due-on-receipt terms.
Should I ever offer early-pay discounts?
Only if cash is tight and the annualized cost beats your alternatives (line of credit, etc.). The tool makes that comparison explicit.