How to Charge a Late Fee on an Invoice

A late fee is a useful nudge — but only when it's fair and was agreed up front. Springing a surprise fee on a client poisons the relationship. Here's how to do it the right way.

Step 1: Put it in your terms first

You can only cleanly charge a late fee if the client knew about it before the work started. Add a line to your contract and your invoice, like:

A late fee of 1.5% per month may be applied to invoices more than 14 days overdue.

If it wasn't in the terms, charging it now feels like a penalty, and the client will push back — fairly.

Step 2: Know what's reasonable

A typical figure is 1–2% per month, or a flat fee for small amounts. The point isn't to profit off the delay — it's to make paying on time the obvious choice. Keep it small enough that a client won't feel attacked, but real enough to matter.

Some jurisdictions also let you charge statutory interest on late business payments without a contract clause — for example, the UK's 8% plus base rate. See UK statutory interest for how that works.

Step 3: Phrase it politely

The goal is to collect the money, not to punish. A reminder that mentions the fee should sound like a heads-up, not a threat:

Subject: Invoice #1042 for $850 — 14 days overdue

Hi Sam,

Invoice #1042 is now 14 days overdue. As noted in our terms, a late fee of 1.5% per month applies to invoices past 14 days, which currently adds $12.75.

If you pay by Friday, I'll waive it. Here's the link: [payment link]

Offering to waive the fee if they pay promptly keeps the tone friendly while making the deadline concrete. Most clients pay right away, and you never actually have to collect the fee.

Step 4: Follow up consistently

A late fee only works if it's actually mentioned when the invoice goes late — which means someone has to send that reminder on the right day. If you're doing it by hand, that's the part that slips. DueBuddy sends the reminders from your name on a schedule, so the fee is raised at the same point every time, without you having to be the one to say it.

Read what to do when a client is late for the full escalation sequence.

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