Late Fee

Late fees (also called late payment fees or penalty fees) are charges added to overdue invoices to compensate for delayed payment and encourage timely payment. These fees should be clearly stated in payment terms before work begins. Late fees are typically calculated as a percentage of the overdue amount (1-2% per month) or a flat fee. While they can help recover costs, excessive late fees may strain customer relationships and may be subject to legal limits in some jurisdictions.