Late fees for freelancers

A late fee is not about the money; it is about making "pay on time" the path of least resistance. Here is what to charge, how to word it, and when to actually apply it.

What to charge

1.5% per month (18% a year) is the most common rate on freelance invoices and is accepted without comment by nearly every client.
A flat fee ($25–$50) works better on small invoices, where 1.5% of $400 is not worth the email.
Both: a flat fee at 14 days, then interest. Simple and hard to argue with.

Check your state or country's cap on interest; most allow rates well above 1.5% a month for business invoices, but a few set limits.

The wording

Contract clauseInvoices are due [net 14]. Balances unpaid [14] days after the due date accrue a late fee of [1.5]% per month, or [amount], whichever is greater, and Provider may pause work until the account is current.

Invoice footerDue [date]. A late fee of [1.5]% per month applies to balances more than 14 days overdue.

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Grace period

Fourteen days after the due date is fair. It absorbs lost emails and slow accounts departments, so when you do apply the fee nobody can call it petty.

Actually applying it

Most freelancers never charge the fee; its job is the sentence on the invoice. When you do apply it, do it on the next invoice as a separate line, with the dates, and offer once to waive it if payment arrives within 5 days. The fee gets you paid; waiving it keeps the client.

Pause, don't threaten

"I'll pause work until the account is current" is the strongest lever you have and it is entirely reasonable. Put it in the contract so it is a rule, not a reaction.