BadCop › Late fees by jurisdiction › Australia

Charging interest and late fees on invoices in Australia

In Australia you can charge interest on overdue invoices if the customer agreed to it before you supplied the goods or services, the rate is transparent, and it is not so high that a court would call it a penalty. Most small businesses use 10% to 12% a year.

The rules

• The clause must be agreed in advance, in written trading terms the customer accepted (signature, tick-box, or clear assent), and restated on the invoice. You generally cannot add interest to an invoice that carried no such term.
• The rate must not be extravagant or unconscionable; 10% to 12% per annum is within the range courts have accepted, and rates above about 15% risk being treated as an unenforceable penalty.
• The unfair contract terms regime applies to standard-form contracts with consumers and with small businesses, so a one-sided late-fee clause in your standard terms can be challenged.
• Sales to consumers must also comply with the Australian Consumer Law.

Configuring it in BadCop

late_fee_pct of about 1.0 (12% a year) with a short grace period is the conventional setting. Put the clause text in the final-notice template so the email quotes the terms the client accepted.

Work the numbers with the late-fee calculator, and see the final-notice template that applies the fee.

Sources

• Late payment interest in Australia: how to charge it legally (Sprintlaw)
• Are late payment fees legal in Australia? (LegalVision)
• How much can I charge for late fees in Australia? (Paidnice)

General information, not legal advice. Verified against the sources above in September 2026; rates and rules change. If money is at stake, ask a lawyer or accountant in your jurisdiction.