Late fees on invoices: can you charge interest?
You can ask for a late fee, but it usually only holds up if your customer agreed to it before the work, and states limit how high it can be.
Get it agreed first
A late fee or interest charge is generally enforceable only when it is part of the agreement: in your contract, your signed quote, your order confirmation or your written terms. Adding a new fee on an invoice after the fact is much harder to collect. Put the wording in the quote, then repeat it on the invoice as a reminder.
What is typical
Many businesses use 1% to 1.5% per month on balances past due, which is 12% to 18% a year. Others charge a flat fee. Some states cap interest or treat high rates as unlawful (usury), and rules can differ for consumers and businesses. Check the rule in your state before you choose a rate.
Example wording
“A late charge of 1.5% per month (18% per year) applies to balances not paid within 30 days of the invoice date, as agreed in the quote dated …”
Reminders come first
Most late invoices are forgotten, not refused. A polite friendly reminder a few days after the due date solves many of them. If it does not, send a past-due notice with the amount and a new deadline, and a final notice only after that. Stay factual and keep copies. Rules for professional debt collectors do not apply to your own reminders, but threats and false statements can create trouble of their own.
In Invoice Studio
You can print late-payment wording on every invoice, and the reminder dialog creates the three letters. It adds a late charge only if you type in a monthly rate yourself.
Frequently asked questions
Can I charge a late fee that is not in my contract?
Generally not reliably. Late fees and interest are normally enforceable only if the customer agreed to them in advance.
What is a normal late fee?
Many businesses use 1% to 1.5% per month, or a flat fee. States may cap the rate.
When should I send a reminder?
A few days after the due date. Start friendly, then past-due notice, then final notice.
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This page is general information as of October 2026. Rules differ by state and industry; check your situation with a tax professional or your state’s revenue department.