A late fee is a charge added when a client pays after the due date. It can be a flat amount or a percentage. Used well, it nudges people to pay on time. Used badly, it starts arguments.
Decide before the work starts
A late fee only works if the client agreed to it up front. Put it in your proposal or contract, and repeat it on every invoice. A fee that first appears on a reminder will feel like a punishment.
Keep it fair and simple
- A small monthly percentage, such as 1 to 1.5% of the unpaid balance, is common.
- Or a flat amount, if your invoices are all similar in size.
- Start counting after a short grace period, say 7 days.
- Check the rules where you and your client live. Some places cap what you can charge.
How to word it on the invoice
“Payment is due within 14 days. Invoices unpaid after 21 days may incur a late fee of 1.5% per month.”
When to waive it
If a good client is a few days late once, waiving the fee and saying so builds goodwill. Mention that you are doing it as a favour, so it does not become the new normal.
Prevention beats the fee
Shorter terms, a deposit and an easy way to pay stop most late payments before they happen. A reminder a few days before the due date helps more than any fee.
