September 12, 2026

Georgia Late Fee Calculator for Invoices: The 7% Rule, the 1.5% Commercial-Account Rule, and the Clause to Use

A plain-English Georgia late fee calculator for invoices: the 7% legal rate, the 1.5%/month commercial-account rule, worked examples, and copy-paste clause wording.

Georgia is one of the friendlier states for charging late fees on invoices, but the rules live in two different sections of the code and most freelancers only ever hear about one. This is a plain-English Georgia late fee calculator for invoices: the two numbers that matter, the math with real examples, and clause wording you can paste into your contract today.

Quick disclaimer: I'm not a lawyer and this isn't legal advice. It's the practical version of what the statutes say.

Can I charge late fees in Georgia? (Short answer: yes)

Yes. Georgia lets you charge interest on overdue invoices, and if your client is a business, you can charge it even without a late fee clause in your contract. That second part surprises people.

There are two statutes doing the work here:

O.C.G.A. § 7-4-2 sets the "legal rate" of interest at 7% per year, simple interest, for any debt where the rate isn't set by a written contract. It also lets the parties agree in writing to a different rate, with a cap of 16% per year on amounts of $3,000 or less.
O.C.G.A. § 7-4-16 is the commercial-account rule. If the money is owed for goods or services sold to a business (not a consumer retail installment deal), you can charge up to 1.5% per month on any portion that's been past due for 30 days or more, calculated from the original due date. The statute says this rate is not usurious, "unless otherwise provided in writing."

One hard ceiling sits above all of this: § 7-4-18 makes charging more than 5% per month a crime. That's why the "10% per month" clauses you see copied around the internet are a bad idea in Georgia.

The two rates side by side

|---|---|---|---|

The practical takeaway: if you work with business clients, 1.5% per month is the rate to use. It's more than double the default 7%, it's explicitly blessed by statute, and you don't have to negotiate it into every contract (though you should still write it down, more on that below).

Georgia late fee calculator for invoices: the math

Both rates are simple interest, which means no compounding. You multiply the overdue amount by the rate and by how long it's been late. That's it.

Formula 1: The 7% legal rate (per day)

Interest = Invoice amount × 0.07 × (days late ÷ 365)

Example: A $4,000 invoice, 45 days late.

$4,000 × 0.07 × (45 ÷ 365) = $34.52

That's about 77 cents a day. It's the fallback a court applies, not a deterrent you design.

Formula 2: The 1.5% commercial-account rate (per month)

The cleanest way to run this is monthly:

Monthly interest = Invoice amount × 0.015

Example: Same $4,000 invoice.

$4,000 × 0.015 = $60.00 per month

If you'd rather prorate to the day (which is fairer on a 45-day invoice than rounding to two full months), convert 1.5% per month to 18% per year and divide by 365:

Daily interest = Invoice amount × 0.18 ÷ 365
$4,000 × 0.18 ÷ 365 = $1.97 per day
45 days late = $88.77

Either method is defensible. Pick one, put it in your contract, and apply it the same way to every client.

One timing wrinkle worth knowing

The commercial-account statute only lets you charge once a balance has been past due for 30 days or more, but the interest is calculated from the original due date. So you can't bill interest on day 10, but on day 30 you can bill for the full 30 days. On a $4,000 invoice that's $60 on day 30, not zero.

Quick reference at 1.5% per month

|---|---|---|---|

| $500 | $7.50 | $15.00 | $22.50 |

| $1,500 | $22.50 | $45.00 | $67.50 |

| $4,000 | $60.00 | $120.00 | $180.00 |

| $10,000 | $150.00 | $300.00 | $450.00 |

If you want to plug in your own numbers with a custom rate and date range, the free late fee calculator does the proration for you.

Flat fee or interest? (And what about consumers?)

A lot of freelancers prefer a flat fee ("$50 if you're more than 15 days late") because it's simpler and lands harder on small invoices. Georgia allows that in business contracts, but flat fees aren't covered by the interest statutes. They're liquidated damages under § 13-6-7, so the fee has to be a reasonable estimate of what the late payment costs you, not a punishment. $50 on a $2,000 invoice is easy to justify. $500 on the same invoice will get thrown out.

Two caveats:

The 1.5% commercial rate needs no contract. A flat fee does. If it wasn't in writing before the work started, you can't add it later.
Consumer clients are different. The commercial-account rule is for business-to-business work. If you bill individuals for personal services (a family for portraits, a homeowner for a deck), stick to the 7% legal rate or a modest written rate, and keep any flat fee small and disclosed up front.

My recommendation: use 1.5% per month for business clients, and only add a flat fee if your invoices are routinely under $500, where 1.5% is too small to matter.

Copy-paste clause wording for Georgia contracts

You technically don't need a clause for the 1.5% commercial rate, but you want one anyway. It kills the "you never told me" argument and lets you name your proration method.

Interest version (business clients):

Payment is due within 30 days of the invoice date. Any amount not paid within 30 days of the due date will accrue interest at 1.5% per month (18% per year), calculated as simple interest from the original due date until paid in full, as permitted by O.C.G.A. § 7-4-16. Client is responsible for reasonable costs of collection, including attorney's fees, if the account is referred to collections.

Flat fee plus interest version:

Invoices are due within 15 days of the invoice date. A late fee of $35 will be added to any invoice unpaid 15 days after the due date. Balances unpaid 30 days after the due date will also accrue interest at 1.5% per month, calculated as simple interest from the original due date. This fee reflects the administrative cost of following up on late accounts.

Gentle version (consumer or long-term clients):

Payment is due within 14 days. Balances unpaid after 30 days may be charged interest at the Georgia legal rate of 7% per year until paid.

Put the same language on the invoice itself, not just in the contract. A one-line footer works: "Overdue balances accrue interest at 1.5% per month per O.C.G.A. § 7-4-16." If you want the full policy written out as a document you can send clients ahead of time, there's a ready-made late payment policy template you can adapt.

When to actually bill it

Having the right to charge interest and choosing to charge it are different decisions. Ground rules that have held up for me:

Warn before you charge. Your day-7 reminder should mention that interest starts at day 30. Nobody is surprised.
Bill it as a separate line. "Interest on Invoice #1042, 32 days past due, per contract: $61.30" is clear and hard to argue with.
Waive it strategically. A good client who pays the day they get the interest notice earns a waiver. A client who ignored three reminders doesn't.
Don't charge interest on interest. Georgia's rates are simple. Calculate on the original invoice amount only.

The best late fee is the one you never collect because the client paid on time to avoid it. The whole point of a Georgia late fee calculator for invoices is knowing exactly what the number would be, putting it in writing, and letting the clause do the work.

If you don't want to track the 30-day mark by hand across a dozen open invoices, automated payment reminder software can send the warning, calculate the interest, and add it to the reminder on the day it kicks in.