What is a fair kill fee in a freelance contract?

A client books six weeks of your calendar. You decline other work. In week two they cancel by email and offer to pay only for “accepted” deliverables — which, in practice, means almost nothing still in draft.

That gap is what a kill fee (cancellation / early-termination fee) is for. It is not a punishment. It is payment for capacity you reserved and cannot instantly refill.

General information only — not legal advice. Enforceability of cancellation fees varies. For a big engagement or a fight over an unpaid kill fee, get local counsel.

Kill fee vs paying for work already done

These are different line items. A clean clause usually does both:

1. Pay for completed (and often in-progress) work at the agreed rate through the termination date.
2. Pay a kill fee for the remaining booked capacity or a slice of the unbilled project value.

If the contract only says “pay for accepted deliverables,” drafts, research, and half-built builds can vanish from the invoice. Push for WIP language, not only the kill-fee percentage.

Structures that tend to feel fair

There is no universal number. What “fair” means depends on how hard the time is to replace and how far along you are. Patterns you will see in freelance and production work:

Fixed-fee projects — percentage of remaining value

Example shape (illustrative, not a template you should paste blindly):

• Client terminates without cause after kickoff.
• Client pays all fees for work completed to date.
• Plus a kill fee equal to about 15–50% of the remaining unbilled project value, often higher earlier in the project when the opportunity cost is largest.

Some people use a sliding scale (higher % before the first milestone, lower after). Others keep one percentage and keep the math simple. Simplicity helps clients say yes.

Hourly or retainer — notice runway

For ongoing work, a kill fee often looks like a notice period:

• Either party may end the engagement with 14 or 30 days’ written notice.
• If the client ends with less notice, they pay for the notice period whether or not they ask for more work.

That is easier for AP teams to understand than a sudden “25% of theoretical remaining hours.”

Milestone projects — pay through the open milestone

Another fair pattern: on termination, the current milestone becomes due in full (or a defined fraction), plus any earlier unpaid invoices. Pair this with a short wind-down for file handover.

What “unfair” looks like on the client’s paper

Watch for termination-for-convenience language that:

• Lets the client end anytime by email
• Limits pay to accepted deliverables only
• Says nothing about WIP, reserved dates, or a kill fee
• Still requires you to hand over all work product on the way out
• Survives alongside unlimited revisions and long Net terms

One soft exit clause is negotiable. Soft exit + soft payment + early IP transfer is a pattern, not an accident.

How to ask without sounding hostile

Frame the fee as calendar protection, not distrust:

I’m blocking this window exclusively for your project, so I need the agreement to cover early cancellation the same way it covers delivery. Happy to use a simple kill fee on remaining value, or a 30-day paid notice — whichever is easier for your team.

Offer two options. Buyers like choosing. “25% of remaining fees within 14 days of notice, plus WIP through the termination date” is concrete enough to mark up.

If they refuse any cancellation economics on a large fixed-fee job, raise the price, require a non-refundable deposit that covers early weeks, or shrink the exclusive hold on your calendar.

Kill fees do not replace payment terms

A kill fee handles early exit. Late fees and pause-work rights handle slow pay. You want both. Otherwise a client can keep the project alive on paper, delay acceptance, and starve the invoice.

For net terms and late-fee mechanics, see the payment terms guide and the longer note on negotiating Net-60. For the structured termination primer, see termination clauses and kill fees.

Quick checklist before you sign

• Can the client terminate for convenience?
• Is WIP through the termination date billable?
• Is there a kill fee, paid notice, or milestone acceleration?
• When is that amount due?
• Do you still have to deliver source files before that amount clears?
• Does IP assign only after those amounts are paid?

If the middle boxes are empty, rewrite before kickoff — not after the cancellation email.

Checking the clause in a real PDF

Cancellation language is easy to skim past because it sits near the back. If you want a plain-English pass over termination, payment, and IP together, run the draft through ClauseClear before you sign. Use it as a review checklist; for high-value disputes, bring a lawyer.

Bottom line

A fair kill fee pays you for finished work and blocked time. Pick a structure your client’s AP team can process (percentage of remaining value, or paid notice), put a due date on it, and do not hand over final ownership or final files until that invoice is cleared.