Washington State Late Fee Calculator for Invoices: The 12% Default Rate, the Usury Ceiling, and the Clause to Use

Quick version: if your invoice says nothing about late fees, Washington lets you charge 12% a year on the overdue balance. If you want more than that, you need it in writing, and how much more depends on whether your client is a business or a person.

This is a Washington state late fee calculator for invoices in two parts. First the math, then the law behind it, then the clause to paste onto your invoices so the fee actually holds up.

The calculator

The formula is the same whether you're using the statutory rate or your own:

Overdue balance × (annual rate ÷ 365) × days late = late fee

If you'd rather not do it by hand, the late fee calculator runs this for any rate and any number of days.

Here's a worked example. A $4,000 invoice, 45 days past due.

| Rate | Where it comes from | Daily interest | Fee at 45 days |

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

| 12% per year | Washington's statutory default (no written agreement needed) | $1.32 | $59.18 |

| 18% per year (1.5%/month) | Only if your invoice or contract says so, in writing | $1.97 | $88.77 |

A few things people get wrong here:

• The clock starts the day after the due date, not the invoice date. Net 30 sent on June 1 means day one of interest is July 2.
• Interest is simple, not compound. You don't charge interest on last month's interest unless your contract explicitly says so, and even then it's asking for a fight.
• Round monthly if your clause says "per month." Many freelancers write "1.5% per month" and then bill it on the 1st of each month. That's fine. Just be consistent, and don't bill a full month's worth on day 3.

Where the 12% comes from: RCW 19.52.010

Washington's interest statute, RCW 19.52.010, sets the legal rate of interest at 12% per year "where no different rate is agreed to in writing between the parties."

That one sentence does two useful things for you.

First, it means an unpaid invoice earns interest even if you forgot to put a late fee on it. Washington treats an overdue invoice as a "forbearance of money," and the default Washington late payment interest rate on that forbearance is 12%. If you ever end up in small claims, that's also the prejudgment interest rate a judge will typically apply to a fixed, unpaid amount.

Second, it tells you exactly what a written agreement unlocks: a "different rate." Anything above 12% has to be on paper the client agreed to. An invoice they received and didn't object to usually counts, and a signed contract or proposal is better.

The usury ceiling: RCW 19.52.020

This is the part that trips people up, because Washington has a usury limit, and it's lower than a lot of freelancers assume.

RCW 19.52.020 caps written-agreement interest at the higher of two numbers: 12% per year, or 4 percentage points above the 26-week Treasury bill yield from the month before your agreement. With short-term rates where they've been the last few years, the T-bill formula lands under 12%, so in practice 12% is the Washington state usury limit for invoices to the clients it protects.

Which brings us to the question that decides everything.

Is your client a business or a person?

RCW 19.52.080 says corporations, LLCs, partnerships, and government entities can't raise usury as a defense at all. Neither can an individual if the transaction was "primarily for agricultural, commercial, investment, or business purposes."

So:

• Business clients. The usury ceiling doesn't protect them. A 1.5% per month (18% per year) late fee in a written agreement is enforceable, and it's the most common rate you'll see on B2B invoices in Washington.
• Consumer clients. A homeowner paying you for a kitchen remodel, a family hiring a photographer, an individual paying for tutoring. The 12% ceiling applies. Charging more than that isn't just unenforceable, it's costly: under RCW 19.52.030, a usurious creditor can lose the excess interest, have twice the interest paid deducted from what they're owed, and pay the other side's attorney fees.

If you serve both kinds of clients, the simplest fix is one clause at 12% for everyone. If most of your work is B2B and you want the higher rate, use two invoice templates and make sure the consumer one says 12%.

What about a flat late fee instead of interest?

You'll see invoices with "$50 late fee after 30 days" or "5% of the balance if paid late." Washington courts treat these as liquidated damages, not interest, which means the test is whether the amount is a reasonable estimate of what the delay actually costs you.

For business clients, a modest flat fee plus interest is generally fine. For consumers, be careful: a flat fee that works out to more than 12% annualized on a small invoice looks a lot like disguised interest, and you don't want to be the test case. If in doubt, stick to a percentage rate.

One more Washington-specific rule

If you're billing a state agency, a city, or a county, the Prompt Payment Act (RCW 39.76) applies instead. Agencies owe you 1% per month on bills not paid within 30 days of receipt, and you don't need a clause for it. Public works subcontractors have their own prompt-pay protections under RCW 39.04.250.

For everyone else, you're back to the 12% default and whatever you put in writing.

The clause to put on your invoices

Two versions. Pick based on who your clients are.

For business clients (1.5% per month):

Payment is due within 30 days of the invoice date. Balances not paid by the due date accrue interest at 1.5% per month (18% per year), calculated daily from the due date until paid in full. Client agrees to pay reasonable costs of collection, including attorney fees, on any balance referred for collection.

For consumer clients, or a single safe version for everyone (12%):

Payment is due within 30 days of the invoice date. Balances not paid by the due date accrue interest at 12% per year, calculated daily from the due date until paid in full, as provided under RCW 19.52.010.

Three things that make the clause stick:

1. It's on the invoice and in the contract or proposal. The invoice alone is often enough for a business client. For a consumer, get it into something they signed or clearly agreed to before the work started.
2. The rate is stated as a number, not "the legal rate." Judges and clients both hate ambiguity.
3. You actually charge it. A late fee you never apply teaches clients it's decorative. Apply it on the first overdue invoice, politely, and it becomes part of how you get paid instead of a bluff.

If you're rolling fees out to existing clients, give them notice before the first one lands. The late payment policy template is a good starting point, and if you build invoices from scratch, the invoice generator has a spot for the terms text.

Running the numbers on your own invoices

Take an overdue invoice you have right now. Multiply the balance by 0.12, divide by 365, multiply by the days past due. That's what Washington says you're owed today with no clause at all. Add the clause above and that number goes up 50% on every B2B invoice from here on.

That's the whole Washington state late fee calculator for invoices: 12% by default, up to 18% in writing for businesses, 12% ceiling for consumers, and one paragraph of terms to make it real.

Tools like automated payment reminder software can apply the fee and send the reminder for you once the clause is in place.