What a kill fee is — and why it exists
A kill fee is an agreed amount you are paid if a project is cancelled before it is finished. It exists because a booked project ties up your time: you turn down other work, plan your schedule around it, and start ramping up. If the client walks away partway through, a kill fee compensates you for the commitment you made and the work you can no longer bill elsewhere. On many freelance agreements it is missing entirely, which means a cancellation can leave you with nothing to show for weeks of held time.
Watch for: A contract with no kill fee or cancellation payment at all, or language letting the client cancel "at any time without further obligation" — which typically means you are owed nothing beyond what you have already invoiced.
Ask for: A defined kill fee that applies if the client cancels after the project starts — often expressed as a portion of the total fee — so a cancellation does not leave your held time uncompensated.
Non-refundable deposits
A deposit paid up front does two things: it confirms the client is committed, and it protects you if they disappear. The key word is "non-refundable." If the agreement is silent, a client who cancels may expect the deposit back, which removes much of its protective value. A clearly non-refundable deposit — earned when the project is booked or when work begins — means you keep it even if the engagement ends early, which is often the practical floor on what a cancellation costs the client.
Watch for: A deposit described as "refundable" or with no stated treatment on cancellation, and language that lets the client reclaim it if they change their mind before you deliver.
Ask for: A deposit stated to be non-refundable and earned on booking or at the start of work, with the agreement spelling out that it is retained if the client cancels.
Payment for work completed to date
Separate from any kill fee, you generally want to be paid for the work you have actually done when a project stops. A fair clause says that on cancellation you are paid for completed and in-progress work up to the cancellation date — sometimes measured against milestones, sometimes on a pro-rata basis. Without this, a client can cancel just before a milestone payment and argue that nothing is yet due, even though you have produced most of the work.
Watch for: Payment tied only to final delivery or full completion, milestone structures where everything is back-loaded, and no mechanism to bill for partial or in-progress work if the project ends midway.
Ask for: A clause stating that on cancellation you are paid for all work completed and in progress up to the cancellation date, plus any non-refundable deposit and agreed kill fee.
What counts as cancellation — and how much notice
It is worth pinning down what actually triggers these protections. A client who stops responding, indefinitely "pauses" the project, or keeps delaying can strand you without ever formally cancelling. A good clause defines cancellation to include prolonged suspension or inactivity, requires written notice, and often gives a notice period so an abrupt stop still comes with some runway. Notice periods vary widely depending on the length and size of the engagement.
Watch for: No definition of what counts as cancellation, no notice requirement, and open-ended "pause" or "hold" rights that let a client freeze the work indefinitely without triggering any payment.
Ask for: A written-notice requirement, a defined notice period suited to the project, and language treating a long suspension or the client going silent as a cancellation that triggers your payment terms.
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Review your contract freeFrequently asked
What is a kill fee?
A kill fee is an amount you are paid if a project is cancelled before completion. It compensates you for time you set aside and other work you turned down to take the engagement. It is common in freelance, creative, and consulting agreements, though many contracts leave it out — which is exactly why it is worth checking for and asking to add.
What is a typical kill fee amount?
There is no single standard — it varies by industry, the size and length of the project, and how much of it is done when it stops. Kill fees are often expressed as a percentage of the total or remaining fee, and sometimes scale with how far along the work is. Rather than anchoring on a fixed number, focus on getting a defined, written kill fee that reasonably reflects the commitment you are making.
Is a deposit refundable if the client cancels?
It depends entirely on what the contract says. A deposit described as non-refundable and earned on booking or at the start of work is generally yours to keep if the client cancels. If the agreement is silent or calls the deposit refundable, a client may expect it back. This is why the deposit clause should state plainly how the deposit is treated on cancellation.
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This guide is general information, not legal advice, and Initialed AI is not a law firm. How cancellation and kill-fee terms are interpreted and enforced varies by jurisdiction. For a high-value engagement, consult a qualified attorney before you sign.