Texas Late Fee Calculator
Calculate late fees for Texas invoices using state-specific rules, maximum rates, and grace periods.
TX Quick Facts
Applicable Statutes
- Tex. Fin. Code § 302.001 (maximum interest)
- Tex. Fin. Code § 303.009 (usury ceiling)
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Texas Late Fee Rules
Texas does not cap commercial late fees by statute, but it does cap effective interest. The key guardrail is the usury ceiling in Tex. Fin. Code § 302.001 — a late fee that annualizes above roughly 18% can be challenged as usurious.
No statutory maximum late fee for commercial invoices — must be reasonable.
Late fees of 10-12% of outstanding balance are generally presumed reasonable.
Monthly fees that annualize above the usury ceiling violate Texas law.
Late fees must be clearly stated in the contract to be enforceable.
Worked Example: Texas Late Fee
A $2,000 invoice 30 days overdue at 1.5%/month incurs a $30 late fee ($2,000 × 1.5%). Flat late fees of 10–12% of the balance ($200–$240 here) are also generally presumed reasonable in Texas.
Important Note
The 18%/year usury ceiling is the key constraint. Any fee effectively exceeding this annual rate could be challenged.
This information is for general educational purposes only and does not constitute legal advice. Texas laws may change. Consult a licensed attorney in your state for advice specific to your situation.
Texas Late Fee FAQs
What is the maximum late fee allowed in Texas?
In Texas (TX), the maximum late fee is: No statutory cap; 10-12% of amount presumed reasonable. The maximum interest rate is 18% per year (usury ceiling, may float to 24-28% for large loans). Always include late fee terms in your contracts before invoicing.
Is there a grace period for late fees in Texas?
Texas grace period: 1-2 days after due date required. Check your specific contract terms and applicable TX statutes for details.
What is the most common late fee rate used in Texas?
The most common late fee rate for commercial invoices in Texas is 1.5% per month. The 18%/year usury ceiling is the key constraint. Any fee effectively exceeding this annual rate could be challenged.
Which Texas statutes govern late fees on invoices?
The key Texas statutes governing late fees and interest on invoices are:
- Tex. Fin. Code § 302.001 (maximum interest)
- Tex. Fin. Code § 303.009 (usury ceiling)
Consult a TX attorney for advice specific to your situation.
Can I charge interest on overdue invoices in Texas?
Yes, up to the usury ceiling (commonly 18%/year). State the rate in the contract; a monthly fee that annualizes beyond the ceiling can violate Texas usury law.
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