Late fees are charges that businesses or organizations impose when a payment is not made by the due date. These fees are common in various areas, such as credit card bills, utility payments, and rental agreements. The purpose of late fees is to encourage timely payments and compensate the lender or service provider for the inconvenience caused by the delay. Typically, late fees are calculated as a fixed amount or a percentage of the overdue payment. For example, a credit card company might charge a $25 late fee if a payment is missed, while a landlord may impose a fee of 5% of the rent due.