BadCop › Late fees by jurisdiction › The united states

Charging late fees on invoices in the United States

There is no federal statutory late-payment interest for private invoices in the US. A late fee is enforceable only if the client agreed to it in advance, in a contract or in invoice terms accepted before the work, and it must stay within your state's usury limits and be reasonable rather than a penalty.

The rules

Late fees are contractual. Put the rate, the grace period and how it is calculated in the contract or the terms the client accepts before you start; adding a fee to an invoice after the fact is generally not enforceable.
The common B2B convention is 1% to 2% per month (12% to 24% a year); 1.5% per month is the most frequently quoted figure.
State usury laws cap interest, and the caps vary widely (some states have no cap on commercial contracts; others are in the 10% to 20% range). Check your state before choosing a rate.
A fee that looks like a punishment rather than compensation for your costs can be struck down as a penalty; keep it proportionate.
Prompt-payment statutes exist for government contracts at the federal and state level and set their own interest rules; they do not apply to private B2B work.

Configuring it in BadCop

A typical configuration is late_fee_pct = 1.5 with grace_days of 0 to 5, and no flat fee unless your contract has one. Make the final-notice template quote the clause: "per section X of our agreement, a late fee of 1.5% per month applies to balances more than N days past due".

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

Sources

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.