Late payment interest / fee clauses, explained
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.
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.
Red flags
- 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
Suggested wording
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.
Check your actual contract
Paste your agreement into Gig Clause for a full clarity score, every flagged clause, and copy-paste suggested wording. Free, no account needed.
Review my contractIs this normal in…
- Late payment interest / fee in a design services agreement?
- Late payment interest / fee in a software / web development agreement?
- Late payment interest / fee in a marketing services agreement?
- Late payment interest / fee in a copywriting & content agreement?
- Late payment interest / fee in a video production agreement?
- Late payment interest / fee in a consulting agreement?
- Late payment interest / fee in a master services agreement (msa)?
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.