A kill fee is a cancellation payment written into your contract that guarantees you get paid a portion of the agreed project price if the client pulls the plug after work has started. It compensates you for the time you already invested, the other work you turned down, and the cost of suddenly having an empty calendar.
How it works
You include a kill fee clause in your contract or proposal before the project begins. The clause specifies how much the client owes if they cancel at various stages. The fee is usually a percentage of the total project price that increases as the project progresses.
A common structure:
| Cancellation timing | Kill fee |
|---|---|
| Before work begins | Deposit is non-refundable, no additional fee |
| During first 25% of project | 25% of total project price |
| During 25-50% of project | 50% of total project price |
| During 50-75% of project | 75% of total project price |
| After 75% of project | 100% of total project price |
The deposit you collect upfront typically counts toward the kill fee. If you collected 25 percent and the client cancels at the 30 percent mark, they owe 50 percent total minus the 25 percent already paid.
Some freelancers use a flat kill fee instead of a sliding scale. For example, “If this project is cancelled after work begins, a cancellation fee of $2,000 applies.” Flat fees are simpler but less flexible for large projects.
Why it matters for freelancers
When a client cancels, you lose the opportunity cost of work you turned down, the momentum of a productive schedule, and you are left scrambling to fill a calendar gap at short notice.
Freelancers bear disproportionate risk. A company can cancel with a quick internal decision. A freelancer who blocked out three weeks now has three weeks of zero income. The kill fee softens the blow enough to keep your business stable. It also makes clients think twice, because when cancellation costs money, they are more likely to work through challenges.
For more on protecting yourself contractually, read our freelance contract essentials guide.
Example
You are a web developer hired for a $12,000 website redesign. Your contract states:
If the Client cancels after work has begun, a cancellation fee applies equal to the greater of (a) the percentage of the total price corresponding to work completed, or (b) the non-refundable deposit.
The client pays a $3,000 deposit (25 percent) and you begin. After two weeks, you have completed wireframes and started design, roughly 40 percent of the project. The client’s funding falls through.
The kill fee is 40 percent of $12,000 = $4,800. Minus the $3,000 deposit already paid, the client owes $1,800. Without a kill fee, you would have two weeks of unpaid work and nothing to show for it beyond the deposit.
Common mistakes
Not including a kill fee clause at all. Many freelancers skip this because it feels awkward to discuss cancellation before starting. But this is exactly when it needs to be addressed. It is a standard business term, not a sign of distrust.
Setting the fee too low. A 10 percent kill fee is barely worth enforcing. Your fee should reflect the actual financial impact, including lost opportunity cost. Twenty-five percent minimum for early-stage cancellation, scaling up from there.
Not specifying who owns the work. State whether the client receives completed deliverables upon paying the fee. If they pay, they get what was done. If they do not pay, you keep everything.
Confusing kill fees with refund policies. A kill fee is what the client owes you. A refund is what you return. Your deposit should be non-refundable. Your kill fee covers work beyond the deposit. For more on deposits, read our deposit strategy guide.
FAQ
How much should I charge as a kill fee? The standard is 25 to 50 percent of total project price for early cancellations, scaling up as the project progresses. Use a sliding scale for projects over $5,000 and a flat fee for smaller engagements.
Will a kill fee clause scare clients away? Legitimate clients will not be bothered. They see cancellation clauses in contracts with agencies and law firms. If a prospect pushes back hard, that signals they are not confident the project will go forward, which is exactly when you need a kill fee most.
What if the client claims the cancellation is my fault? Your clause should specify it applies when the client cancels for reasons unrelated to your performance. Include a separate provision for breach on your end. Clear language prevents this argument. GetPaidFirst proposals include cancellation terms by default, so both sides have clear expectations from the moment the project is approved.