Free Late Payment Interest Calculator for Freelancers
Work out exactly how much overdue interest and fees you can charge a late-paying client — under EU statutory rules or a custom rate — in seconds.
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 remains unpaid, plus — in many cases — a fixed compensation fee. The interest compensates you for the cost of the delay: the cash you should have had is instead sitting with your client, and simple daily interest reflects that lost time value of money. The longer an invoice goes unpaid, the more the interest accrues, which gives clients a real incentive to pay on time rather than 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 you're owed money by a business or public authority in the EU and no other rate was agreed in the contract, the statutory interest rate is the European Central Bank's main refinancing reference rate plus a fixed margin of 8 percentage points per year. On top of the interest, the directive entitles you to a flat minimum compensation of €40 per invoice for the cost of recovering the debt — you don't need to prove any actual cost to claim it. The ECB reference rate changes periodically, so 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; 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, rather than relying on a default.
Why charging late fees is good practice
Many freelancers hesitate to charge late fees, worried 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 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. And when they don't, the fee at least partially compensates you for the delay, the admin time spent chasing payment, and 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 and your client's location.
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, it's optional to actually invoice for it, but under the EU directive you're entitled to claim it without needing to prove any recovery cost. Many freelancers choose to include it 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 — so set a rate that matches your own terms and check your state's rules before invoicing for real.