Is late payment interest / fee normal in a master services agreement (msa)?

A master services agreement (msa) should include a late-payment fee of about 1-1.5% per month on overdue balances and a right to pause work. If the draft has none, add one; it is one of the few clauses that actually changes client behavior.

What’s market-standard

1% to 1.5% per month (roughly 12-18% annualized) on overdue balances, plus the right to suspend work until the account is current. Some jurisdictions cap the rate, so 'the lesser of 1.5% per month or the maximum permitted by law' is common phrasing.

Warning signs

• Clause is entirely absent
• Client-favorable version that penalizes the freelancer for late delivery but is silent on late payment
• Explicit waiver of any late fee or interest

Wording you can send

Overdue amounts accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law. The Provider may suspend performance on 5 business days' notice while any undisputed amount is overdue.

What it means for you

A charge that accrues when the client pays late. Without it, there is no financial consequence for a client that pays 60 days after the due date.

Not legal advice. Gig Clause is software, not a law firm or a professional service, no attorney reviews, drafts, or is otherwise involved in anything it produces. It automatically highlights common contract issues and suggests negotiation language. Using it does not create an attorney-client relationship. For decisions with significant financial or legal consequences, consult a qualified attorney licensed in your jurisdiction. Clause standards vary by industry and location and change over time.