Yes, your sentence sounds very natural. You could also say, "I don't mind if you come in late as long as you don't wake me up."

If you say "I don't mind if you come late" - It means either I don't mind if you are late (as in not on time) OR it can mean I don't mind if you get here late (as in, late in the day like at night) If you say "I don't mind if you come in late" - It implies coming into somewhere, like coming home late, or coming in to a shop late. For the context where you are using it here, it is correct to say come in because you are talking about coming home.

come late