What to charge
| Form | Typical | Best for |
|---|---|---|
| Monthly percentage | 1% to 2% per month | Invoices of a few thousand and up |
| Flat fee | $25 to $50 per month late | Small invoices, where a percentage is trivial |
| Flat then percentage | Flat at 30 days, percentage after | Mixed client sizes |
Two rules of thumb. Keep it plausible. A fee large enough to look punitive invites an argument about whether it is enforceable, and you would rather have the invoice paid than win that argument. And give it a grace period, usually five to seven days, so a payment that crossed in the post does not trigger a fee and a phone call.
Some states cap what you can charge on certain kinds of debt. If you are charging a percentage, it is worth one search for your own state before you set the number.
Wording to put on the invoice
Short, specific, and in the terms block rather than buried in the notes.
Percentage
Payment is due within 30 days of the invoice date. Invoices unpaid after 35 days carry a late fee of 1.5% per month on the outstanding balance.
Flat fee
Payment is due within 14 days of the invoice date. A $35 late fee applies to invoices unpaid after 21 days, and for each further month the balance remains outstanding.
On the estimate, before any work happens
Terms: 30 days from invoice date. A late fee of 1.5% per month applies after a 5 day grace period. Accepting this estimate accepts these terms.
The three conditions that make it stick
- The client saw it before the work started. On the estimate they accepted, or in the contract they signed. This is the one that matters and it is the one people skip.
- It is on the invoice itself, in the same words, every time. Terms that change between documents are terms you will end up negotiating.
- You actually apply it, consistently. A late fee you waive for everyone is not a policy, it is a decoration, and clients work that out quickly.
When not to charge it
- When the invoice was wrong. Fix it, reissue it, and start the clock again.
- When you never named a due date. There is nothing for the fee to attach to.
- When the relationship is worth more than the fee. A good client having a bad quarter is not the target. The fee exists to change the behaviour of people who pay late by default.
Put the terms on the document
Every invoice, estimate and receipt here has a terms block, and the late fee can be set as a percentage or a flat amount with a grace period, a recurrence and a cap. It appears on the PDF and on the hosted page the client sees. Make an invoice.
The part Pro does for you
Pro applies the fee on its own once the grace period passes, keeps it inside the cap you set, and shows the accrued amount on the invoice the client is looking at. It also sends the reminder that names the fee, which is usually what gets the invoice paid rather than the fee itself.
Pro is $9 a month. See what is in it.
Common questions
Can I add a late fee to an invoice I already sent?
Not retroactively, unless the terms the client accepted already provided for it. If the fee was never agreed, the honest move is to put it on your terms going forward rather than on this invoice.
What is a reasonable late fee?
1% to 2% per month is the common range for professional and trade invoicing, or a flat $25 to $50 a month on smaller invoices where a percentage would be trivial. Keep it plausible and give it a grace period.
Do late fees actually get invoices paid?
The fee itself rarely does. What works is that a late fee gives you a specific, unemotional thing to put in the day 30 email, which is a much easier message to send than asking again.