How this number is made
A late fee is only collectible if the contract or the invoice says so, and some states cap it. This page is the arithmetic of a flat fee plus a monthly percent prorated by days. It does not know the cap. One and a half percent a month is a figure that shows up on invoices and is not a recommendation.
- Days late start the day after the terms, if that is what the invoice says.
- A zero flat fee is fine if you only charge interest.
Formula
Fee = flat fee + invoice × monthly percent × days ÷ 30.
Worked example
With the figures already in the form, late fee is $50.00.
Questions
Is 1.5% a month legal?
Sometimes, and sometimes it is usury or a penalty a court will not enforce. The contract and the state decide. This page only multiplies.
Do I charge it on the tax?
Type the balance the agreement says is subject to the fee.