Getting paid
Late fee
A charge that accrues on overdue invoices, commonly around 1.5% per month, so a payment deadline has consequences.
What it means
A late fee is a charge that starts accruing when an invoice goes unpaid past its due date. It is what turns a payment deadline from a suggestion into an actual deadline.
Why it matters
A net term with no late fee is a deadline with nothing behind it. There is no cost to the client for paying two weeks, or two months, late. A stated late fee gives the invoice teeth and, just as importantly, gives you something concrete to point to when a payment slips, rather than an awkward chase with no basis.
What fair looks like
- A late fee of roughly 1.5% per month on overdue balances is a common, defensible figure. Check that any late-payment penalties in the contract do not run one way only, against you.
- The fee is stated plainly in the payment section, next to the net term: for example, "Net-30, with a 1.5% monthly fee on overdue balances."
- Local rules on maximum interest and late charges vary, so treat the figure as a typical starting point rather than a fixed rule.
Related reading
See the guide to what late fee a freelancer can charge, and Net-30 vs Net-60.