Guides

How to charge a late fee on an invoice

Updated September 30, 2026

You can charge a late fee on an invoice if your client agreed to it before the work started. Put the fee and when it applies in your contract and on every invoice, then apply it the same way every time.

1. Agree on it before the work

A late fee works when it's a term your client already said yes to, not a surprise. Add a line to your contract, proposal or quote. If you don't use contracts, put it in writing in the email where they accept your price.

2. Pick an amount

• Flat fee: a set amount, like $25 or $50. Simple and easy to understand. Good for smaller invoices.
• Percentage: often 1% to 2% of the unpaid amount. Scales with bigger invoices.

Keep it proportionate. A fee that feels like a penalty invites a fight; one that feels fair gets paid. Some states limit late fees and interest, and rules are stricter when your client is a consumer rather than a business, so check what applies where you and your clients are.

3. Decide when it applies

Choose between the day after the due date or a short grace period, like 7 days. A grace period gives good clients room for a slow bank transfer. Whatever you pick, say it plainly on the invoice.

4. Show it on every invoice

Write the terms in the invoice notes, for example: "Payment due October 15. A $25 late fee applies if unpaid 7 days after the due date." This is your proof the client was told.

5. Remind before it hits

Most late payments are forgetfulness, not refusal. A friendly reminder a few days before the due date gets many invoices paid on time, so you never need the fee. If it does go late, send one notice saying when the fee will be added.

6. Apply it, or waive it on purpose

When the deadline passes, add the fee as a new line on the invoice. If you decide to waive it for a good client, do it deliberately and say so. Apply your terms consistently, or clients learn they're optional.

How Dunn handles it

You set the fee (flat or percentage) and when it applies. Dunn writes the terms onto the invoice, sends a reminder 4 days before the due date and a warning before the fee lands, then puts one updated bill in front of your client. You can approve, lower or waive any fee, and every email and reply is kept as your record.

Quick answers

Can I charge a late fee if it was not in my contract?
It is much harder to enforce. Add late fee terms to your contract or quote before the work, and show them on every invoice.

How much is a normal late fee?
Commonly a flat $25 to $50, or 1% to 2% of the unpaid amount. Check the limits where you and your clients are.

Should I give a grace period?
Many businesses give 7 days. Whatever you choose, state it on the invoice so the client knows exactly when the fee applies.