Kill Fee: What It Is, Typical Rates and How to Invoice

Quick answer: A kill fee is a payment a client owes a freelancer when it cancels a project before completion. Contracts commonly set it as a percentage of the total fee, with figures of 25% to 50% often cited, or tiered by project stage up to 100% of work already done. You invoice it as a separate line citing the contract clause, minus any deposit already paid.

Cancelled projects are one of the most expensive surprises in freelancing. You have blocked time, turned down other work and often finished a large part of the job. A kill fee clause turns that risk into a predictable payment. This guide covers what a kill fee is, how kill fee percentages are usually set, sample clause wording, a worked example and the invoice layout. You can create the kill fee invoice in our free invoice generator.

What is a kill fee?

A kill fee (also called a cancellation fee or termination fee) is an agreed amount payable to a freelancer or contractor if the client "kills" the project before it is finished, for reasons that are not the freelancer's fault. The term comes from journalism, where publications agreed to pay writers a portion of the fee if a commissioned article was not published. It is now common in design, photography, video, copywriting, development and consulting contracts.

The kill fee compensates you for:

• Work already completed.
• Time reserved that you could have sold to another client.
• Expenses incurred, such as stock images, travel or software bought for the job.

Kill fee vs deposit vs cancellation fee

Term	When paid	Purpose
Deposit or retainer	Before work starts	Secures your time; often non-refundable or credited to the final bill
Kill fee	Only if the client cancels mid-project	Compensates for work done and time reserved
Cancellation fee	If a booking is cancelled close to a date	Common for shoots, events and sessions; often time-based
Milestone payment	When a stage is completed	Reduces exposure; see milestone payments

In practice, "cancellation fee freelance" and "kill fee" are often used interchangeably. What matters is the wording in your contract.

What is a typical kill fee percentage?

There is no legal standard kill fee percentage. Rates are agreed between the parties, and the right number depends on how much work is front-loaded and how hard the slot is to refill. Ranges commonly cited by freelancers and industry groups:

• Editorial writing: often 25% to 50% of the agreed fee.
• Design, branding and development: frequently tiered by stage, from a lower percentage before concepts to most or all of the fee once final files are in progress.
• Photography, video and events: often tied to how close the cancellation is to the booked date, sometimes up to 100% for very late cancellations.

A tiered kill fee is usually fairer and easier to defend than a single number:

Cancellation point	Kill fee (example)
After signing, before work starts	Deposit retained (for example, 25%)
After discovery or first concepts	50% of total fee
After revisions begin	75% of total fee
After final files are in production	100% of total fee

Treat these as examples to adapt, not industry rules. Unusually high fees can be challenged in some legal systems as penalties, so a fee that reflects real work and lost opportunity is safer.

How to write a kill fee clause

A good kill fee clause answers five questions: when it applies, how much, what expenses are added, what happens to the deposit, and who owns the work afterward. Sample wording to adapt:

Cancellation. If the Client cancels this project for any reason other than the Contractor's material breach, the Client will pay a kill fee based on the stage reached: 50% of the total fee after delivery of initial concepts, 75% after the first round of revisions, and 100% after final production begins, plus any approved expenses incurred. Deposits already paid will be credited against the kill fee. On payment, the Contractor retains all rights in unused work unless otherwise agreed in writing.

Place it in your main agreement alongside payment terms. Our freelance contract template includes cancellation among its core clauses. In some jurisdictions, clauses that look like punishment rather than compensation can be unenforceable, so take local legal advice for large contracts.

Worked example: calculating and invoicing a kill fee

A designer signs a $4,000 brand identity project. The contract requires a 50% deposit and has the tiered kill fee clause above. The client pays the $2,000 deposit, the designer delivers initial concepts, and then the client cancels because of a budget freeze. The designer also bought a $150 font licence for the project, approved by the client.

Item	Calculation	Amount
Kill fee: cancelled after initial concepts (50%)	50% x $4,000	$2,000.00
Approved expense: font licence	At cost	$150.00
Total owed	$2,000 + $150	$2,150.00
Less deposit paid (INV-0102)		-$2,000.00
Balance due	$2,150 - $2,000	$150.00

If the client had cancelled after revisions started, the kill fee would be 75% x $4,000 = $3,000, plus $150, minus $2,000, leaving $1,150 due. This is why a deposit plus a kill fee clause works so well: most of the risk is already covered by money in your account.

How to invoice a kill fee

1. Confirm the cancellation in writing. Reply to the client's message, note the date and the stage reached, and say you will invoice per the clause.
2. Issue a new invoice with its own number. Do not edit the original project invoice.
3. Describe the line clearly: "Kill fee per clause 9 of agreement dated 3 September 2026: project cancelled after initial concepts (50% of $4,000)."
4. List expenses separately with receipts.
5. Deduct the deposit and show the balance due, or issue a credit note if the deposit exceeds the kill fee and you owe a refund.
6. Set a due date such as 14 days and include payment instructions.

If you had already issued an invoice for the full project, void or credit it rather than leaving it open; see how to void an invoice.

How to negotiate a kill fee with clients

Most clients accept a kill fee clause when it is presented as standard practice rather than a sign of distrust. A few approaches that tend to work:

• Frame it as scheduling protection. "I reserve this time exclusively for your project and turn down other work, so the agreement includes a cancellation schedule."
• Show the tiers. A stage-based table feels fair because the client pays less the earlier it cancels.
• Offer a trade. If a client pushes back on the percentages, you might accept a lower kill fee in exchange for a larger deposit, or keep the fee but give the client the partial files on payment.
• Keep the language neutral. Call it a cancellation schedule or termination fee if "kill fee" sounds aggressive to a corporate client.
• Do not drop it entirely. If a client refuses any cancellation protection, treat that as a signal about how a future dispute might go.

Large companies sometimes use their own supplier agreements with a termination-for-convenience clause. Read it carefully: many say the company pays only for work completed to the date of termination. You can still ask to add a minimum payment or to have work in progress valued at the stage-based percentages.

Kill fees for different types of freelance work

Writers and journalists

Publications often have a standard kill fee in their contributor terms. Check whether it applies only after you file a draft, and whether you keep the right to sell the piece elsewhere. Pitch acceptance by email is not always a full contract, so ask for written terms before you start reporting.

Designers and developers

Stage-based tiers fit naturally with concept, revision and production phases. Tie each tier to a deliverable the client has received, so there is no argument about how far the project had progressed.

Photographers, videographers and event freelancers

Here the date is often the main cost: a cancelled shoot day is hard to rebook. Time-based tiers are common, such as a higher percentage for cancellations within 14 days and the full fee within 48 hours. Add non-refundable costs such as location fees, crew bookings and equipment hire.

Is a kill fee taxable?

A kill fee is income, so it is taxable in the same way as your normal fees. Indirect tax can be less obvious. In the UK, HMRC changed its policy in 2022 to treat most early termination and cancellation charges as consideration for a supply, which means VAT applies if the original service was subject to VAT. Other countries treat cancellation payments differently. If you charge VAT, GST or sales tax, confirm the treatment with an adviser.

Common kill fee mistakes

• No clause at all. Trying to negotiate a kill fee after cancellation rarely works.
• A vague clause. "A reasonable fee" invites a dispute. Use percentages tied to stages.
• Forgetting expenses. Licences, travel and materials should be added.
• Not crediting the deposit. Charging the full kill fee on top of a deposit looks like double billing.
• Handing over all files before payment. Keep work in progress until the kill fee clears, unless the contract says otherwise.

Kill fee checklist

• Kill fee clause signed before work starts, with stage-based percentages.
• Deposit taken and credited against any kill fee.
• Cancellation confirmed in writing with the date and stage.
• Separate kill fee invoice with clause reference, expenses and deposit deduction.
• Rights in unused work addressed.
• Follow-up plan if unpaid: reminder, formal demand, then escalation steps for a client not paying.

Next step

Add a stage-based kill fee clause to your next proposal and pair it with a deposit. If a client cancels, open the invoice generator, add the kill fee and expense lines, deduct the deposit and send the PDF the same day. Groups such as the Freelancers Union also publish contract resources worth reviewing.