Late fee on an invoice: wording and how much to charge

How much late fee can I charge?

What the client agreed to in writing before the work, within your state's interest law. At 1.5% a month the $1,200 invoice owes $18 for each month late, and 1.5% a month is 18% a year. With no agreed rate, Texas allows 6% a year from the 30th day after the due date, and Washington's default is 12% a year.

On the same invoice that is $6 a month in Texas, starting December 14, 2026, and $12 a month in Washington. A higher rate has to be in the signed terms, and before you print 18% a year, read your own state's interest statute. A client who pays late every month needs a deposit more than a bigger fee.

What should the late fee wording on an invoice say?

The rate or amount, the date it starts and whether it repeats, in the same words as your quote or contract. Put it beside the due date so a reminder is never the first time the client reads it. Copy the line that fits:

• "Payment is due by November 14, 2026. A late fee of 1.5% per month ($18 on this invoice) is added to any balance unpaid after that date."
• "A one-time late fee of $25 applies to payments received after November 14, 2026."
• "Payments received after November 14, 2026 are charged the greater of $25 or 1.5% of the balance for each month late."
• On the statement once it is late: "Invoice 1047, due November 14, 2026: $1,200. Late fee, first month: $18. Now due: $1,218."

Should I charge a flat late fee or a percentage?

A flat fee is simple and hits small invoices hard; a percentage grows with the bill. $25 on a $150 invoice is 16.7% of it in one month, while 1.5% of $150 is $2.25, less than the time it takes to chase. On $8,000, $25 barely registers and 1.5% is $120. If your jobs vary in size, charge the greater of the two; the percentage takes over above $1,667.

Apply the rate to the original balance each month: two months late on $1,200 is $36. Charging fees on earlier fees needs a compounding term. Show each month's fee as its own line on the statement.

Can I add a late fee to an invoice that is already overdue?

If the fee wasn't in the terms the client accepted, adding it now hands a slow payer something to argue about. Ask for the original amount and add the fee to your terms from the next job. Federal agencies are different: under the Prompt Payment Act, an agency that pays a proper invoice late must in most cases add interest itself, 4.75% a year for July 1 to December 31, 2026.

In New York City, the Freelance Isn't Free Act gives a freelancer who isn't paid on time the right to collect double the unpaid amount, through a complaint to the city's Department of Consumer and Worker Protection. With no payment date in the contract, payment is due 30 days after the work is done.

Frequently asked questions

Sources

• Texas Legislature: Finance Code chapter 302, Interest Rates · Checked 2026-10-15

  Sec. 302.002: with no agreed interest, a creditor may charge 6% a year beginning on the 30th day after the amount is due.

• Washington State Legislature: RCW 19.52.010, rate in absence of agreement · Checked 2026-10-15

  Interest of 12% a year where no different rate is agreed to in writing.

• Bureau of the Fiscal Service: Prompt Payment · Checked 2026-10-15

  In most cases an agency that pays a vendor late must pay interest; the rate for July 1 to December 31, 2026 is 4.75%.

• NYC Department of Consumer and Worker Protection: Freelance workers' rights · Checked 2026-10-15

  Freelancers not paid on time can collect double the unpaid amount; with no payment date in the contract, pay is due within 30 days of completing the work.