Money & Taxes
Free Late Payment Interest Calculator for Freelancers
Work out exactly how much overdue interest and fees you can charge a late-paying client, whether you're using EU statutory rules or a custom rate, in seconds.
No account, no login. Everything runs in your browser, and nothing gets uploaded.
Tidied result
Informational only, not legal advice.
How late payment interest works
When a client pays an invoice late, you're entitled in most jurisdictions to charge interest on the outstanding amount for every day it stays unpaid, plus a fixed compensation fee in many cases. That interest exists because the cash you should have had is sitting with your client instead of you, and simple daily interest accounts for that lost time value of money. The longer an invoice goes unpaid, the more interest builds up, giving clients a real reason to pay on time instead of treating freelancers as free short-term credit.
The EU rule: 8 percentage points over the ECB rate, plus €40
Under the EU Late Payment Directive (2011/7/EU), if a business or public authority in the EU owes you money and your contract didn't set another rate, the statutory interest rate is the European Central Bank's main refinancing reference rate plus a fixed margin of 8 percentage points per year. The directive also entitles you to a flat minimum compensation of €40 per invoice for the cost of recovering the debt, and you don't need to prove any actual cost to claim it. Because the ECB reference rate changes periodically, always check the current figure before invoicing a client for real.
Outside the EU: rules vary by state and country
If your client is in the US, there's no single federal late-fee interest rate. Rules on maximum late fees and default interest vary by state and often depend on what your contract or invoice terms already say. Some states cap late fees or require specific contract language, while others leave it largely to what both parties agreed. Always check your own state's rules and put a clear late-fee clause in your contract or invoice terms up front instead of relying on a default.
Why charging late fees is good practice
Many freelancers hesitate to charge late fees because they worry it will damage the client relationship. In practice, a clearly stated, consistently applied late-fee policy does the opposite. It signals that your invoices are meant to be taken seriously, and it removes the awkwardness of chasing payment informally. Clients who know a late fee applies are simply more likely to pay on time. When they don't, the fee at least partially makes up for the delay and the admin time spent chasing payment, plus the opportunity cost of not having that cash available.
Is charging late fees legal?
Yes. In most jurisdictions, freelancers can charge late payment interest and fees, either under statutory rules like the EU Late Payment Directive or under terms agreed in a contract or invoice. Always check the rules that apply in your location and your client's.
What is the EU Late Payment Directive?
Directive 2011/7/EU sets a default statutory interest rate for late business-to-business payments in the EU: the ECB reference rate plus 8 percentage points per year, along with a flat minimum €40 compensation per overdue invoice, unless the parties agreed different terms in their contract.
Do I have to charge the €40 fee?
No. Invoicing for it is optional, but under the EU directive you're entitled to claim it without needing to prove any recovery cost. Many freelancers include it anyway, as a matter of policy, to reinforce on-time payment expectations.
What if my client is in the US?
Use the "US / custom" interest basis in this calculator. There's no single federal late-fee rate: rules vary by state and by what your contract says. Set a rate that matches your own terms, and check your state's rules before invoicing for real.
My contract says "1% fee, compounded daily" or "5% every 30 days" — how do I calculate that here?
Those are common vendor/services-contract late-fee clauses. This calculator applies a simple (non-compounding) annual interest rate to work out daily interest, so for a flat rate charged every 30 days, enter roughly that rate × 12 as your "US / custom" annual rate for a close approximation. True daily compounding grows faster than simple interest and isn't what this tool models, so check your contract's exact wording — and the actual compounding math it specifies — before invoicing for real.