Updated 19 October 2026. Standard late fees are 1-2% per month. A $1,200 invoice with a 1.5% monthly clause, due 31 October 2026, adds $18 if it is still unpaid on 1 December. The clause has to be on the invoice before you send it. Write it in the invoice generator, then download the PDF.
1.5% per month (18% annualised) is the most common B2B rate and is widely considered reasonable. Going below 1% looks toothless; going above 2.5% per month risks being challenged as a penalty.
Generally no. For a late fee to be legally enforceable, the policy must have been disclosed before the invoice was sent — on the invoice, in your contract, or in published terms.
Late fees are legal in virtually all jurisdictions, but most have caps. US states generally allow B2B late fees up to 18-24% annualised.
Simple interest — calculated on the original overdue balance each month — is more conservative and easier to defend in court.
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