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Invoice payment terms: Net 30, due dates and late fees

What Net 30 and due on receipt mean, which terms to choose, and what UK, EU, US and Indian law lets you charge when a business client pays late.

By Harish11 October 20266 min read

Payment terms are the sentence on your invoice that says when you expect to be paid, and what happens if you are not. “Net 30” means the full amount is due 30 days after the invoice date. The single most useful thing you can do is replace it with an actual date, because “Due 27 October 2026” leaves nothing to work out and “Net 30” asks the client to do the arithmetic.

If you are billing a business, the law in the UK, the EU and India also gives you a right to interest and a fixed fee when they pay late, whether or not your invoice mentions it. Most freelancers never use it. It is worth knowing it is there.

What the common terms mean

Term	Meaning
Due on receipt	Payable as soon as the client has the invoice. In practice, within a few days.
Net 7, Net 14, Net 30	The full amount is due that many days after the invoice date.
Net 30 EOM	Due 30 days after the end of the month the invoice is dated in. An invoice dated 2 September is due 30 October, not 2 October.
2/10 Net 30	A 2% discount if paid within 10 days, otherwise the full amount in 30. Common between larger businesses. Rare for freelancers, because 2% is a lot of margin to give away for twenty days.
50% upfront	Half before work starts, half on delivery. Two invoices, each with its own number and due date.

Neither a due date nor payment details appears in the legal lists of what an invoice must include in any of the places we checked. Put both on anyway. Two habits make any of these terms work better.

Write the date, not only the term. An accounts team pays against a date in their system. Give them one. If you want to keep the term as well, “Due 27 October 2026 (Net 30)” does both.

Put how to pay right next to it. Bank details, a payment link, or a reference to quote. The most common reason an invoice is paid late is not reluctance. It is a missing detail that someone has to email you about.

Which terms to choose

There is no law that sets your terms for you, but there are limits and defaults, which is the next section. Within them, a few rules of thumb:

Shorter is fine if you agreed it up front. Fourteen days is normal for freelance work. Our generator starts every new person on 14 days for that reason.
Match the client, not the template. A large company may have a 30 or 45 day payment run that no invoice will change. Ask before you start, and put their terms in your contract.
Terms only bind a client who agreed to them. Printing “Net 7” on an invoice for work agreed at 30 days does not change the agreement. The invoice restates terms; the contract sets them.

What the law says when a business pays late

This is the part most invoice advice skips. In several places you have a legal right to charge a business client interest and compensation for late payment, and the law also caps how long a client can make you wait.

UK

Under the Late Payment of Commercial Debts (Interest) Act 1998, for payments between businesses:

If you did not agree a date, payment is late 30 days after the client gets the invoice, or 30 days after you deliver the work, whichever is later.
If you did agree a date, GOV.UK says it “must usually be within 30 days for public authorities or 60 days for business transactions”. Longer is possible between businesses, but it must be fair to both.
Interest is 8% a year plus the Bank of England base rate. You cannot claim this statutory rate if your contract sets a different one.
A fixed sum on top, once per invoice: £40 for a debt up to £999.99, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more.

A change is on the way but is not law yet. The Commercial Payments Bill, introduced in the House of Lords in May 2026, would cap business payment terms at 60 days and make the statutory interest impossible to contract out of. Until it passes, the rules above are the ones that apply.

EU

The Late Payment Directive (2011/7/EU) sets a floor that every member state builds on, so the exact numbers vary a little by country.

Default: where the contract fixes no date, interest runs after 30 days from receipt of the invoice or of the goods or services.
Limit: a payment period between businesses may not exceed 60 days “unless otherwise expressly agreed in the contract and provided it is not grossly unfair to the creditor”. Public authorities get 30 days, and 60 at most.
Interest: at least eight percentage points above the reference rate, which in the euro area is the European Central Bank’s main refinancing rate.
A fixed sum of at least €40 per late payment.

The EU proposed replacing the Directive with a stricter regulation in 2023. As of September 2026 the European Parliament lists that proposal as blocked in the Council. The Directive is still the law.

United States

There is no general federal rule for late payment between private businesses. It is set by your contract and by state law. The federal Prompt Payment Act, which people often find first, only covers federal agencies paying their own contractors.

Freelancers in New York have more. The state’s Freelance Isn’t Free Act, in force since 28 August 2024, requires payment on the date in the contract or, if there is none, no later than 30 days after the work is finished. Contracts worth $800 or more, alone or added together over 120 days, must be in writing. New York City has had its own version since May 2017.

India

If you are registered as a micro or small enterprise under the MSMED Act 2006, a buyer must pay you by the date agreed in writing, and that agreed period cannot exceed 45 days. With no written agreement, payment is due within 15 days. Both periods run from the day the buyer accepts the goods or services, not from the invoice date. Paying late makes the buyer liable for compound interest, with monthly rests, at three times the bank rate notified by the Reserve Bank of India.

Should you put a late fee on the invoice?

A line such as “Late payments are subject to statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998” costs nothing, tells the client you know your rights, and does not commit you to charging it. Many freelancers keep it in their notes and never invoke it. That is a reasonable use of a legal right.

Be careful with inventing your own fee. A contract can set a different interest rate, but in the UK that replaces the statutory rate rather than adding to it. If you want something other than the statutory scheme, put it in the contract before the work starts, not on the invoice after it ends.

None of this applies to consumers. The statutory schemes above are for payments between businesses.

How our generator handles due dates

The invoice has an issue date and a due date, both printed on the PDF. A new person starts on 14 day terms. After that, each new invoice keeps the terms of your last one: if you set the due date 30 days after the issue date, the next invoice is due 30 days after its own issue date. Change the issue date and the due date moves with it, so the terms stay the same.

Payment details and any late payment line go in the notes box, which is also remembered for next time. The generator does not yet send reminders or track whether an invoice has been paid.