Everything freelancers and small businesses need to know about charging late fees, interest rates, and collecting overdue invoices in Washington.
This information is provided for general educational purposes only and does not constitute legal advice. Laws change frequently. Consult a licensed attorney in Washington for advice on your specific situation. Last reviewed: 2026.
Usury laws cap the maximum interest rate that can be charged on overdue payments in Washington.
12% general limit
Washington's usury limit is 12% for non-exempt transactions (RCW 19.52.020). The default judgment rate is also 12%.
Commercial loans, particularly those over $100,000, are often exempt. Licensed financial institutions have separate rate structures.
Understanding what you can and cannot charge for late payments in Washington.
Late fees are permitted when agreed upon in writing. Consumer protection laws (CPA, RCW 19.86) may apply to unreasonable fees.
No statutory cap; reasonableness standard applies.
Fees must be reasonable. Washington's Consumer Protection Act may apply to excessive fees.
Washington Prompt Payment Act sets deadlines and penalties for late payments in Washington.
30 days for state contracts.
1% per month.
RCW 39.76 requires state agencies to pay within 30 days. Interest at 1% per month accrues on late payments.
Certain industries in Washington have additional rules around payment timelines, liens, and collection procedures.
Construction: RCW 60.04 provides mechanics' lien rights. Claims must be filed within 90 days of completion.
Technology: Seattle's tech industry typically uses Net 30 terms with standard late fee clauses.
Government contracts: RCW 39.76 mandates 30-day payment with 1% monthly penalty.
Use this compliant wording on your invoices to clearly communicate your late fee policy in accordance with Washington law.
Payment is due within 30 days. A late fee of 1% per month (12% per annum) will be assessed on unpaid invoices, as permitted under Washington law (RCW 19.52.020).
This wording works because it clearly states the rate, when it applies, and references Washington legal standards. Always ensure your stated rate complies with Washington's usury limits.
Practical tips for invoicing within Washington's legal framework.
Before you can charge a late fee in Washington, your client needs to have agreed to the terms. Include your late fee clause directly on your invoice and in your contract.
Washington caps interest rates at 12% general. Charging above this limit can void your right to collect interest entirely and may expose you to penalties.
A reminder 3 days before the due date and a follow-up the day after dramatically reduces late payments. Automated reminders ensure nothing slips through the cracks.
If you ever need to escalate collection efforts in Washington, documented reminder history strengthens your position. Automated systems keep logs automatically.
ChaseBot handles the math, the timing, and the follow-ups so you can focus on your work.
Set compliant rates and let ChaseBot handle the math. Never accidentally exceed state limits.
98% open rate. Reminders that actually get seen. Automatic escalation sequences built in.
Stop sending reminders for already-paid invoices. ChaseBot syncs with Xero in real time.
Free tier: 5 invoices/month. No credit card required.
Compare Washington's rules with neighboring and commonly referenced states.
Get industry-specific invoice reminder templates and strategies.
ChaseBot automates invoice reminders with built-in compliance tools. Free plan, no credit card, 30-second setup.