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Can I Charge Late Fees?

Maximum Late Fee | Penalties

Below are the maximum penalties that can be charged if an invoice is not paid. Any late fees must be written in the invoice at the time of sending it to a client. The late fee is calculated by the total amount owed multiplied by the interest rate (%) on a per annum basis.

 

By Country (Top 50)

COUNTRY MAXIMUM PENALTY SOURCE
USA 0%; however, most states implement a sales tax N/A
Argentina No maximum rate N/A
Australia 48% from interested collected plus other fees Consumer Credit Act in NSW and ACT
Bangladesh 6% Trading Economics
Belgium No maximum rate N/A
Brazil 6.5% Banco Central Do Brasil
Bulgaria No maximum rate N/A
Canada 60% § 347 of the Criminal Code
Chile 36% Science Direct
China 36% Bloomberg
Colombia 33% Borradores de Economia
Dominican Republic No maximum rate Latin Lawyer
Finland 7 percentage points higher than the interest rate applied by the European Central Bank Finland Interest Act (633/1982)
France An annual rate higher than 1/3 the average percentage rate applied by credit institutions is usury French Consumer Code Article L313-3
Germany 5 percentage points above the basic rate of interest (currently 3.62%) Section 288(1) of German Civil Code
Greece 2 percentage points above the maximum contractual interest rate. E-Justice
Hong Kong 60% Hong Kong Legistlation Cap. 163, Section 24(1)
Hungary No maximum rate N/A
India At such rate as the Court deems reasonable India Code Usury Laws Repeal Act, 1855, Section 2
Ireland 187% to 287% Consumer Credit Act
Israel 13% per annum, 17% per annum on arrear interest Banking Regulation in Israel: Prudential Regulation versus Consumer Protection
Italy 25% plus 400 basis points (or exceed average market rate by 800 basis points) Lexology
Jamaica 6% Money Lending Act
Kenya No maximum rate N/A
Malaysia 12% for secured loan, 18% for an unsecured loan Moneylenders’ Act 1951, Section 17A
Mexico No maximum rate N/A
Morocco No maximum rate N/A
Netherlands No maximum, except on consumer credit loans Practical Law
New Zealand No maximum rate Commerce Commission New Zealand
Nigeria 48% Practical Law
Norway No maximum rate N/A
Pakistan Interest not permitted under Pakistani laws for domestic lending Practical Law
Panama No maximum rate N/A
Peru No maximum rate N/A
Philippines No maximum rate N/A
Poland 4 times the pawn loan rate of the National Bank of Poland Polish Civil Code Article 359(2¹)
Portugal 7% or 9% (depending on in rem guarantee) Law and Practice Portugal, Section 4.3 ( Full PDF)
Puerto Rico (USA) 6% Financing USA
Russia Cannot exceed more than twice usual applicable rate Civil Code Chapter 42, Section 1, Article 809(5)
Saudi Arabia No maximum rate N/A
Singapore 4% per month Singapore Ministry of Law
South Africa 10% National Credit Act, Chapter 5, Part C (105)
Spain No maximum rate N/A
Sri Lanka 20%, 18%, or 15% Sri Lanka Money Lending Ordinance Section 4(2)
Sweden No maximum rate N/A
Switzerland 10% or 12% Swiss Credit Consumer Act, Section 3
Thailand 15% Thai Civil and Commercial Code Book 3, Chapter II, Section 654 (Full PDF)
Ukraine No maximum rate N/A
United Kingdom No maximum for payday loans Credit Unions Act 1979
Vietnam 20% Vietnamese Civil Code, Chapter XVI, Section 4, Article 478(1) (Full PDF)
Zimbabwe Not specifically defined Moneylending and Rates of Interest Act, Chapter 14:14, Section 8 (Full PDF)
 
 

Usury Rates by State

State

USURY RATE SOURCE
Alabama 6% maximum for verbal agreements, 8% for written agreements. § 8-8-1
Alaska Cannot exceed 10% or 5 percentage points above Federal Reserve interest rate; 10.5% if loan is more than $25,000. § 45.45.010
Arizona 10% unless agreed upon in a written contract. § 44-1201
Arkansas May not exceed the applicable rate of interest (17%) set forth in Section 3 of the Arkansas Constitution, Amendment 89 . § 4-57-104
California 7% for money, goods, or things in action; 10% for money, goods, or things in action for personal, family, or household purposes; or the greater of 10% or 5% + the prevailing rate established by the Federal Reserve Bank of San Francisco for any other use. Article XV
Colorado Maximum is 45% per annum. If no written agreement exists, interest rate may not exceed 8%. § 5-12-103
Connecticut Interest rate may not exceed 12%. § 37-4
Delaware Maximum rate of interest is 5% over the Federal Reserve discount rate. No limitations on interest rates for loans exceeding $100,000. § 2301
Florida 18% unless loan exceeds $500,000, in which case the rate of interest can be 25% (in accordance with § 687.071(2)) § 687.03
Georgia Maximum interest rate is 7% if no written contract exists; 16% on loans of $3000 or less; and any rate of interest may be established by parties to a written contract for loans of $250,000 or more. § 7-4-2
Hawaii 10% without a written contract; 12% for consumer credit transactions; and 10% on judgments recovered in any civil suit. § 478-2§ 478-3, and § 478-4
Idaho Maximum of 12% if no contract exists. 5% plus base rate on money due on judgments. § 28-22-104
Illinois 5% without a written contract, 9% maximum if agreed upon by parties to a written agreement. 815 ILCS 205/4 and 815 ILCS 205/1
Indiana Interest rate may not exceed 8%. Consumer loans may be charged a maximum of 25%. § 24-4.6-1-102 and § 24-4.5-3-201
Iowa 5% with no written contract; for written agreements, 2 percentage points above the monthly average 10-year constant maturity interest rate of US government notes and bonds. § 535.2(1) and (3)(a)
Kansas 10% maximum if no other interest rate was agreed upon. Bonds, bills, promissory notes, or other written instruments may stipulate a maximum of 15%. § 16-201 and § 16-207
Kentucky Legal rate of interest is 8%. If a written agreement exists, the rate may be increased to 4% in excess of the discount rate on 90-day commercial paper in effect at the Federal Reserve Bank OR 19%, whichever is less, on loans of $15,000 or less. Any rate is permitted for loans in excess of $15,000. § 360.010
Louisiana Maximum interest rate is 12% per annum. § 9:3500(C)(1)
Maine Without a written contract, maximum interest rate is 6%. Maximum rates for consumer credit sales are 30% for first $1,000, 21% between $1,000 and $2,800, 15% for more than $2,800, and 18% on all unpaid balances. 9-B § 432 and 9-A § 2-201
Maryland Maximum is 6% unless a written agreement is established, in which case interest rate can be up to 8%. § 12-102 and § 12-103
Massachusetts 6% maximum interest rate with no written agreement. Charging more than 20% interest is considered criminal usury. Ch. 107 § 3 and Ch. 271 § 49
Michigan 5% if no written agreement exists, 7% if an agreement is made between the parties in writing. § 438.31
Minnesota Interest rate is 6%, unless a different rate is agreed upon in writing. Interset rate may not exceed 8%. § 334.01
Mississippi Maximum interest rate is 8% per annum. “Contract rate” may not exceed the greater of 10% or 5% above the discount rate on 90-day commercial paper in effect at the Federal Reserve Bank. § 75-17-1
Missouri Rate of interest may not exceed 10% if a written instrument exists, unless the “market rate” is higher. § 408.030
Montana Interest rate is 10% per annum. Parties may agree in writing to a maximum interest rate of 15% OR 6 percentage points above prime rate established by Federal Reserve System, whichever is greater. § 31-1-106 and § 31-1-107
Nebraska Maximum interest rate is 16%. § 45-101.03
Nevada Parties may agree in writing to any interest rate. Without a written agreement, the rate shall not exceed the prime rate at the largest bank in Nevada. § 99.040
New Hampshire Maximum rate of interest is 10% § 336:1
New Jersey Maximum rate of interest is 6% without a contract. Maximum rate of interest with a written contract is 16%. § 31:1-1
New Mexico Rate of interest shall not exceed 15% without a written contract. § 56-8-3
New York Interest rate is 6% per annum unless a different rate is prescribed in NY CLS Banking, in which case legal interest rate is 16%. Gen. Oblig. § 5-501 and Banking § 14-A
North Carolina Legal rate of interest is 8%. § 24-1
North Dakota Maximum interest rate is 6%. Maximum contract rate is 5.5% higher than current cost of money but no less than 7%. § 47-14-05 + 09
Ohio Written contracts may not stipulate a rate of interest exceeding 8%. § 1343.01
Oklahoma Parties may agree to any rate permitted by state law; otherwise, 6% is the maximum rate without a written contract. § 15-266
Oregon Maximum interest rate is 9%. § 82.010(1) + (3)
Pennsylvania Maximum interest rate is 6% for loans of $50,000 or less. 41 P.S. § 201
Rhode Island Interest rate may not exceed the greater of 21% or the alternate rate of 9 percentage points plus the domestic prime rate. § 6-26-2
South Carolina Legal rate of interest is 8.75%. § 34-31-20
South Dakota 12% where no contract exists; no interest rate limit if parties agree in writing. § 54-3-4 and § 54-3-16(3)
Tennessee Unless the parties agree in writing, the maximum interest rate is 10%. § 47-14-103
Texas Unless the parties agree in writing, the maximum interest rate is 10%. § 302.001(b)
Utah Unless the parties agree in writing, the maximum interest rate is 10%. § 15-1-1
Vermont Maximum rate of interest is 12%. 9 V.S.A. § 41a
Virginia Legal rate of interest is 6%. If parties agree in writing, the interest rate may be a maximum of 12%. § 6.2-301 and § 6.2-303
Washington Rate of interest may not exceed 12% OR 4 percentage points above the equivalent coupon yield of the average bill rate for 26-week treasury bills. § 19.52.020
West Virginia Parties may agree to a maximum interest rate of 8%; otherwise, the legal interest rate is 6%. § 47-6-5
Wisconsin Legal interest rate is 5%. § 138.04
Wyoming Maximum interest rate is 7% if no agreement exists. § 40-14-106
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