Free tool

Late Payment Fee Calculator

Work out what an overdue invoice has accrued under the terms in your contract. Enter the dates, the rate and the basis it accrues on, and this shows the days actually accruing, the interest, any one-time fee, and the total now due. It computes what you enter — it does not tell you what you are entitled to charge.

Total amount due

$51,736.30

Invoice amount: $50,000.00
Days past due: $60.00
Grace period: $0.00
Days accruing: $60.00
Interest: $986.30
Late fee: $750.00

How the calculation works

Days past due: Payment date − Due date; Floors at zero if paid early.
Days accruing: Days past due − Grace period
Late fee: Invoice × Late fee %; Charged once, and only after the grace period.
Interest — daily: Invoice × Rate % × (Days ÷ 365)
Interest — weekly: Invoice × Rate % × (Days ÷ 7 ÷ 52)
Interest — monthly: Invoice × Rate % × (Days ÷ 30 ÷ 12)
Interest — flat: Invoice × Rate %; Once, regardless of elapsed time.
Total due: Invoice + Interest + Late fee

Worked example

Invoice amount: $50,000.00
Due date: 01/01/2026
Payment date: 03/02/2026
Days past due: 60
Grace period: 0 days
Days accruing: 60
Interest at 12% daily basis: $986.30
Late fee at 1.5%: $750.00
Total amount due: $51,736.30

The accrual basis matters more than it looks. The same 12% over the same 60 days produces $986.30 on a daily basis and $1,200.00 on a monthly one, because 60 days is two 30-day months but only 16.4% of a 365-day year. Use the basis your contract specifies.

How to use it

01Enter the invoice amount and the due date from the invoice, not the invoice date.
02Enter the payment date, or today's date if the invoice is still outstanding.
03Set the grace period if your contract allows one. Nothing accrues until it has passed — including the late fee.
04Enter the interest rate as an annual figure and pick the basis your contract specifies.
05Use the late fee field for a one-time charge, separate from interest that accrues over time.

Common mistakes

Charging the late fee during the grace period

A grace period suppresses everything, not just interest. Applying a one-time fee the day after the due date when the contract allows ten days makes the whole invoice easier to dispute.

Mixing up the accrual basis

Twelve percent per year and one percent per month are the same rate; twelve percent per month is not. Reading a monthly rate as annual, or the reverse, changes the figure by an order of magnitude.

Counting from the invoice date

Interest runs from when payment became due, not when the invoice was issued. On net 30 terms that is a month of interest you are not entitled to.

Assuming any rate is enforceable

Contracts cap what can be charged, and many jurisdictions regulate interest on construction payments — particularly public work. A rate being in your terms does not by itself make it collectable.

Questions

How is interest on a late construction payment calculated?

Multiply the outstanding amount by the rate, prorated for the time it has been overdue on the basis your contract specifies — daily on a 365-day year, monthly, weekly, or as a flat one-time charge.

What is a prompt payment act?

Legislation in many US states setting deadlines for payment on construction projects and, in some cases, the interest that applies when those deadlines are missed. Terms vary considerably by state and between public and private work, so check the statute that applies to your project.

Can I charge both interest and a late fee?

Only if your contract provides for both. Some allow interest only, some a single administrative fee, some both. Charging what is not in the contract weakens the claim rather than strengthening it.

Does a grace period stop interest as well as the fee?

In this calculator, yes — nothing accrues until the grace period has passed. Contracts differ, so confirm whether yours suspends interest, the fee, or both.

Is there a standard late payment rate in construction?

No. It depends on the contract and, on public projects, often on statute. Enter the rate your contract specifies rather than an assumed industry figure.