A kill fee is what a client owes you when they cancel a project after work has already started. The term comes from publishing, where editors would kill a commissioned article and pay the writer a fraction of the agreed fee. Today it applies across all freelance disciplines — design, development, photography, writing, video, consulting — and it belongs in every project-based contract.
Without a kill fee clause, a client who cancels midway through a project can leave you with time spent, opportunity costs, and nothing to show for it. Whether the cancellation is in bad faith or a legitimate business decision, the result for you is the same.
Why kill fees exist
When a client hires you for a project, two things happen from your side: you spend time on the work itself, and you decline other work to hold capacity for this client. If the client cancels, both of those things have real cost. You may have turned down another project that would have filled that time. You may have already delivered research, drafts, wireframes, or code that can't easily be repurposed.
A kill fee acknowledges those costs. It is not a penalty clause — it is a contractual acknowledgment that cancellation is not cost-free, and that the risk of cancellation is shared between both parties rather than falling entirely on the freelancer.
Kill fees also benefit clients in a less obvious way: they set clear, predictable terms for the cost of cancellation, which makes it easier for a client to make that decision cleanly rather than stringing the project along because they feel bad about canceling outright.
How to structure the amount
The most common approach is a tiered kill fee based on how far work had progressed at the time of cancellation. This reflects the actual cost structure: the later in a project you are when it is cancelled, the more time you have invested and the harder it is to replace that income on short notice.
| Stage at cancellation | Typical kill fee | Rationale |
|---|---|---|
| Before work begins (pre-kickoff) | 25% of total fee | You declined other work to hold the slot; time spent is minimal but opportunity cost is real. |
| After kickoff, before first deliverable | 25–50% of total fee | Discovery, research, planning, and early output have begun. Time spent is substantial. |
| After first deliverable submitted | 50–75% of total fee | Core work is largely done; the client has received value they cannot return. |
| After final delivery / revisions complete | 100% of total fee | Work is complete. Non-payment at this stage is simply non-payment. |
For projects billed hourly rather than at a flat fee, a kill fee may instead mean payment for all hours worked to date plus a fixed cancellation fee for the opportunity cost. Either approach is reasonable — what matters is that it is specified in writing before work begins.
Is a kill fee a liquidated damages clause?
Legally, a kill fee clause functions as a liquidated damages provision: the parties agree in advance on the amount to be paid in the event of a specific breach (the client canceling the project). Courts will generally enforce liquidated damages clauses in B2B commercial contracts when two conditions are met: the damages were difficult to estimate at the time the contract was formed, and the amount is a reasonable estimate — not a penalty.
A kill fee of 25–50% of project value typically satisfies both conditions. It reflects genuine uncertainty about what other work the freelancer could have taken on, and it is proportionate to the project value rather than punitive. Courts are more skeptical of kill fees that exceed the total contract value, or that apply even when the client cancels before work begins with no loss to the freelancer.
If you want a thorough overview of how payment clauses work in freelance contracts more generally, see our guide to what clauses a freelance contract needs.
What to write in the clause
A kill fee clause has three moving parts: (1) the trigger — what constitutes "cancellation" by the client, (2) the amount — how much is owed and how it varies by project stage, and (3) the IP outcome — what happens to the work already completed.
On IP: by default, if you retain ownership of undelivered work under your copyright, the client has no rights to use it after paying a kill fee — unless the clause says otherwise. Many freelancers are comfortable granting the client a limited license to the completed portions once the kill fee is paid; others prefer to retain all rights. Either is a legitimate choice, but it needs to be stated explicitly. Under 17 U.S.C. § 204(a), any transfer of copyright ownership must be in a signed writing, so a verbal agreement to "give them the files" is not a copyright transfer.
Clausio can draft a freelance contract with a kill fee clause tailored to your project type and billing structure.
The difference between a kill fee and a deposit
These two things often get confused. A deposit is paid upfront, before work begins, to secure the freelancer's time and signal the client's commitment. A kill fee is owed if the client cancels — it may be applied against any deposit already paid, but they are separate concepts.
A deposit does not automatically function as a kill fee unless your contract says it does. If you take a 25% deposit and your contract does not include a kill fee clause, a client who cancels may be able to demand the deposit back by arguing the consideration (the project) was never delivered. Spell out explicitly what the deposit covers and what is non-refundable. See our related guide: how much deposit should a freelancer ask for?
How to present a kill fee to clients without losing the deal
The most effective framing is mutual: "This protects both of us. If I need to cancel, I'll give you adequate notice and a refund of any unused deposit. If the project is cancelled from your side after we've started, this is what I need to cover my time." Most clients who intend to see a project through have no objection to a kill fee clause — the ones who object strenuously are, in experience, often the ones most likely to actually cancel.
Present it as a standard term, not an accusation. It is in your contract template for every client — it is not personal.
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A kill fee is a contractual payment owed to a freelancer when a client cancels a project after work has begun. It compensates the freelancer for time spent and for the opportunity cost of holding that capacity for the client.
Industry convention ranges from 25% to 50% of the total project fee, depending on how far work had progressed at the time of cancellation. A tiered structure is common: 25% if cancelled before work begins, 50% if cancelled mid-project, and 100% if cancelled after delivery.
A kill fee clause in a signed contract is generally enforceable as liquidated damages if the amount is a reasonable estimate of the freelancer's actual loss. Courts typically enforce such clauses in B2B agreements when the amount is proportionate and not punitive.
Not automatically. Your kill fee clause should specify whether IP rights transfer on payment of the kill fee, or whether the freelancer retains all rights to the killed work. Most freelancers retain IP on killed projects unless the clause expressly assigns it under a signed writing, as required by 17 U.S.C. § 204(a).
Not legal advice. Clausio is an AI-assisted document drafting tool — not a law firm and not a substitute for a qualified attorney. Using Clausio does not create an attorney-client relationship. Nothing on this page constitutes legal advice or a legal opinion. For advice about your specific situation, consult a licensed attorney in your jurisdiction. Full disclaimer →
Related resources
- What clauses does a freelance contract need? — the full list with the law behind each
- How much deposit should a freelancer ask for? — and how it interacts with a kill fee
- Freelance payment terms explained — Net 15 vs. Net 30, late fees, and more
- Freelance contract template — with kill fee, deposit, and IP assignment
- Build your freelance contract →