The Freelance Kill Fee: What It Is and How Much to Charge
Short answer: a kill fee is a cancellation charge you collect when a client pulls the plug on a project after you've started but before it's finished. It pays you for the time you've already committed and the work you turned down to take the job. A common kill fee is 25–50% of the project total (or all completed milestones plus a percentage of the rest). It only protects you if it's written into your contract before the work begins.
Before you can price a kill fee, you need to know what your time is actually worth. The free Freelance Rate Calculator → shows your real hourly and project rate after tax and expenses — the number a kill fee is meant to protect.
What a kill fee actually is
A kill fee compensates you for a project that gets canceled, shelved, or "killed" partway through — through no fault of yours. Maybe the client lost funding, changed direction, or simply went quiet. Without a kill fee, you've burned days or weeks of capacity, turned away other work, and have nothing to invoice for the unfinished portion.
The term comes from publishing — a writer assigned an article that gets cut still gets a "kill fee" for the work done. For freelancers and contractors it does the same job: it caps your downside when someone else cancels.
Kill fee vs deposit — they're not the same
People mix these up. They solve different problems and you want both.
| Deposit | Kill fee | |
|---|---|---|
| When paid | Before work starts | When the client cancels mid-project |
| What it covers | Commitment + cash flow to begin | Work done + lost opportunity after cancellation |
| Typical size | 25–50% upfront | 25–50% of remaining total, or completed work + a percentage |
| Refundable? | Usually non-refundable | Owed in addition to the deposit, not instead of it |
The upfront deposit gets you paid before you start. The kill fee covers everything after that, if the project dies before completion. A non-refundable deposit is effectively your minimum kill fee — the kill fee clause is what tops it up to fair compensation for work already done.
How much should a kill fee be?
There's no fixed rule, but three structures cover most freelance work:
| Structure | How it works | Best for |
|---|---|---|
| Flat percentage | 25–50% of the total project fee, regardless of stage | Small, fast projects where stage is hard to measure |
| Completed work + percentage | 100% of work delivered + 25–50% of the unfinished remainder | Most milestone or phased projects |
| Sliding by phase | Higher percentage the further into the project the cancellation happens | Large projects with clear stages |
The deeper you are into a project — and the more work you turned away to take it — the higher the fee should be. A cancellation in week one costs you less than one in week six.
Not sure what a fair project total even is? Use the free Freelance Rate Calculator → to price the whole engagement first. Your kill fee is a percentage of that number, so getting the base rate right is step one.
A worked example
You take a $6,000 website project, billed in three milestones. The client pays a $2,000 deposit, you finish phase one ($2,000 of work), and then they cancel. Your contract says: completed work is owed in full, plus a 40% kill fee on the remaining balance. You've delivered $2,000, and 40% of the remaining $4,000 is $1,600 — so you invoice $3,600 total. The deposit covers the first $2,000; they owe $1,600 more.
Without the clause, you'd likely keep the $2,000 deposit and eat the rest. The kill fee turns "I lost a month" into "I got paid fairly for the time I committed."
The copy-paste kill fee clause
Put this in your contract before any work starts. Adjust the numbers to your structure:
Cancellation / Kill Fee. If the Client cancels, postpones indefinitely, or terminates the project for any reason after work has begun, the Client agrees to pay: (a) 100% of the fees for all work completed and delivered to the date of cancellation, plus (b) a cancellation fee equal to 40% of the remaining unpaid project balance. Any deposit already paid is applied toward this amount and is non-refundable. The final cancellation invoice is due within 14 days.
Keep it short, name a clear percentage, and tie it to "after work has begun." Read it aloud with the client when you send the contract so it's never a surprise.
How to actually collect it
- Point to the clause calmly. "Per our agreement, here's the cancellation invoice." It's not a negotiation — it's the contract you both signed.
- Itemize it. Show completed work, the remaining balance, the kill-fee percentage, and the deposit credit. Clarity prevents disputes.
- Send a proper invoice with the same payment terms you use normally, and a due date.
- Escalate like any unpaid bill if they stall — reminder, late fee, then formal collection. See how to handle late-paying clients.
The deposit is your safety net here: because it's already in your account, even a client who refuses the kill fee can't claw back the work you've delivered.
Watch-outs
- No clause, no kill fee. You can't bolt this on after a client cancels — it has to be agreed in advance, in writing.
- Take a deposit too. A kill fee you have to chase is worth far less than money already in your account. Pair it with a non-refundable deposit.
- Keep it reasonable. A 90% kill fee on week-one cancellations reads as a penalty and is harder to enforce; tie the amount to work actually done.
- It's taxable income. A kill fee you collect is ordinary self-employment income, same as any project payment.
A kill fee is part of the same toolkit as deposits, clear payment terms, and a real contract — the things that keep a canceled project from becoming an unpaid one. Build them into every engagement and a client walking away costs you a fee, not a month.
Price the project right, then protect it
A kill fee is only as good as the project total it's a percentage of. The $9 Freelance Rate & Tax Calculator spreadsheet nets your rate against self-employment tax and expenses so you price each engagement at a number worth protecting — and know exactly what a 25–50% kill fee actually recovers. Sending the invoice too? Get the calculator + invoice template in the $14 Starter Pack →
Frequently asked questions
What is a kill fee for freelancers?
A kill fee is a cancellation charge a freelancer collects when a client cancels or shelves a project after work has started but before it's finished. It compensates you for the work already done and the opportunity cost of turning down other jobs to take the project. It must be written into your contract before the work begins to be enforceable.
How much should a freelance kill fee be?
A common kill fee is 25–50% of the project total, or 100% of completed work plus 25–50% of the remaining unfinished balance. The deeper into the project the cancellation happens and the more work you turned away to take it, the higher the fee should be. The amount should be tied to work actually done so it reads as fair compensation, not a penalty.
What's the difference between a kill fee and a deposit?
A deposit is paid before work starts and covers commitment and initial cash flow; a kill fee is owed when a client cancels mid-project and covers work done plus lost opportunity. You want both: the deposit is money already in your account, and the kill fee clause tops it up to fair compensation if the project is canceled. A non-refundable deposit is effectively your minimum kill fee.
How do I collect a kill fee?
Point calmly to the cancellation clause in your signed contract, itemize the completed work and the kill-fee percentage, credit any deposit already paid, and send a proper invoice with a due date. If the client stalls, escalate like any unpaid invoice — reminder, late fee, then formal collection. A non-refundable deposit already in your account protects the work you've delivered even if they dispute the rest.
Is a kill fee taxable?
Yes. A kill fee you collect is ordinary self-employment income, the same as any other project payment, and is reported on your Schedule C. Set aside your usual tax percentage on it just as you would on a normal invoice.