California Late Fee Calculator
Calculate late fees for California invoices using state-specific rules, maximum rates, and grace periods.
CA Quick Facts
Applicable Statutes
- Cal. Civ. Code § 1671 (liquidated damages)
- Cal. Const. Art. XV, § 1 (usury)
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California Late Fee Rules
Late fees treated as liquidated damages — presumed valid for commercial contracts.
Courts have upheld 1.5% per month (18% annually) on commercial accounts.
The 10% constitutional usury cap has broad exemptions for B2B transactions.
Late fees that function as penalties with no relation to actual damages are unenforceable.
Important Note
California uses a "reasonableness" standard. In practice, 1.5%/month (18%/year) is widely used and upheld for commercial accounts.
This information is for general educational purposes only and does not constitute legal advice. California laws may change. Consult a licensed attorney in your state for advice specific to your situation.
California Late Fee FAQs
What is the maximum late fee allowed in California?
In California (CA), the maximum late fee is: No statutory cap; must be "reasonable". The maximum interest rate is 10% per year (constitutional default); commercial transactions often exempt. Always include late fee terms in your contracts before invoicing.
Is there a grace period for late fees in California?
California grace period: No statutory requirement for commercial invoices. Check your specific contract terms and applicable CA statutes for details.
What is the most common late fee rate used in California?
The most common late fee rate for commercial invoices in California is 1.5% per month. California uses a "reasonableness" standard. In practice, 1.5%/month (18%/year) is widely used and upheld for commercial accounts.
Which California statutes govern late fees on invoices?
The key California statutes governing late fees and interest on invoices are:
- Cal. Civ. Code § 1671 (liquidated damages)
- Cal. Const. Art. XV, § 1 (usury)
Consult a CA attorney for advice specific to your situation.
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