Kill Fees for Freelancers: How to Write One Clients Will Sign

At FreelanceAtlas, we help freelancers get paid for the work they actually do. This guide covers what AIGA, the Graphic Artists Guild and the National Writers Union publish, the penalty rule that limits what you can charge, New York’s written-contract law, and how cancellations work on Upwork and Fiverr, with three clause templates and a cancellation email. Read it alongside Freelance Contracts for Beginners: What You Need to Know and Freelance Payment Terms That Actually Get You Paid: Deposits, Milestones, and Net 30.

This article is general information, not legal advice. Contract law differs by state and by country, so have a lawyer licensed in your jurisdiction review any kill fee or cancellation language before you rely on it.

What a Kill Fee Is, and Why the Name Comes From Publishing

The term comes from publishing. Columbia Law School’s Kernochan Center for Law, Media and the Arts defines it this way: “Many freelance writing contracts include a provision that gives the author a payment in the event that the publisher ultimately declines to publish the work. This is often called a kill fee.” The “kill” is the publisher’s decision not to run the piece.

The logic carries over to any freelance work. You did the assigned work, or started it, and the client changed course for reasons that had nothing to do with you: a budget freeze, a new boss, a pivot. Without a kill fee, your contract may say nothing about what the client owes, and nothing is what you may get.

What AIGA, the Graphic Artists Guild and the NWU Actually Publish

There is no universal kill fee percentage. What exists is a handful of published models, each one organization’s template or one negotiated agreement, not a law and not an industry-wide rate.

AIGA: Work to Date Plus a 25 Percent Early Termination Fee

AIGA’s Standard Form of Agreement for Design Services is a model contract for AIGA members, co-written by an intellectual property attorney. It lets the agreement be ended “for convenience at any time by either party.” The designer is then paid for work through the termination date, as the greater of any advance payment, a prorated share of the fees, or hourly fees for the work done. If the client terminates for convenience, it also pays “an early termination fee equal to 25% of the total Project fee.”

For motion design, where AIGA’s commentary calls a lump-sum kill fee standard, a supplement swaps in a flat fee. The client agrees that the designer has reserved availability and forgone other work, and that the fee “represents reasonable compensation for such lost opportunities.”

Graphic Artists Guild: 50 Percent Before Final, 100 Percent After

The Graphic Artists Guild’s sample letter of agreement says cancellation fees “are due based on the amount of work completed.” It makes 50 percent of the final fee due within 30 days if the job is canceled or postponed before the final stage, and 100 percent if the art has been completed, with all rights reverting to the artist. A separate Guild contract checklist lists the standard as a ladder: “25% upon assignment, 50% after sketch, 100% after completion of final art.” The worked example below follows that shape.

National Writers Union: 50 Percent When Assigned Work Is Rejected

The NWU’s agreement with Jacobin states: “When work is assigned and rejected without request for revision, writer is entitled to 50% of the agreed upon fee.” Payment, “including kill fees,” is due within thirty days of completion of the work. That is a union-negotiated term with one publisher, not a rate you can assume elsewhere.

Kill Fee, Deposit, Termination for Convenience: Which Tool Does What

Mixing these up produces a contract that sounds protective and pays nothing.

• Deposit. Money paid before work starts. It is security, not a fee. AIGA’s guide says that if the project is canceled, “the deposit will be refunded less any amounts due to the designer.” It only works as a kill fee if your contract makes part of it non-refundable.
• Work completed to date. The client pays for what you have done, by milestone, pro rata or hourly. It is the floor, and it pays nothing for the weeks you blocked out.
• Termination for convenience. A clause that lets a party end the contract without proving fault. Once the client has that right, your only protection is the payment attached to using it.
• Cancellation clause. The umbrella section that says how either side can end the project and what gets paid.
• Kill fee. The extra amount, flat or percentage, for reserved time and turned-down work.

Match the tool to the booked time at risk. For a project of a week or two, a deposit plus work-to-date billing is usually enough. Multi-phase projects need a staged kill fee tied to milestones, retainers need a paid notice period, and commissioned writing suits a percentage of the agreed fee.

The Penalty Rule: Why Your Kill Fee Must Be a Reasonable Estimate

In US contract law, a pre-agreed payment for breach is called liquidated damages, and courts will not enforce one that works as a punishment. Cornell’s Legal Information Institute, in its entry on the penalty clause, quotes the Restatement (Second) of Contracts, section 356: “Damages for breach by either party may be liquidated in the agreement but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty.”

The Uniform Commercial Code, which is written for sales of goods, says nearly the same in section 2-718, adding “the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy” to the test.

How a court classifies a particular cancellation clause depends on its wording and on local law. The safe drafting approach is the same regardless: a number you could explain to a judge.

• Anchor it to work done. Payment for completed work is the price of work delivered.
• State the lost opportunity in the clause, as AIGA’s motion supplement does, using your own facts, such as the weeks you blocked.
• Scale it down as the project advances, because less booked time remains to lose.
• Cap it at the project fee. A charge that can exceed the whole contract is hard to call compensation.

AIGA’s guide also advises you to “always include prevailing party attorneys’ fees language in your contract.” These are US sources. Outside the US, your own country’s contract law decides what is enforceable.

A Staged Kill Fee Tied to Milestones: A Worked Example

Say you quote $12,000 for a website, split into four milestones in your scope of work: Discovery $2,400 (20 percent), Design $3,600 (30 percent), Build $4,200 (35 percent) and Launch $1,800 (15 percent). You take a 25 percent deposit, $3,000, credited against your invoices. This is a hypothetical, and the percentages are assumptions for the illustration, not a standard.

1. Estimate the work done at each stage as the milestones already approved plus half of the milestone in progress.
2. Add a reservation charge of 20 percent of the balance not yet performed. The assumption: you can rebook about 80 percent of any freed time at short notice. Change it to fit your pipeline, and write down why.
3. Print the results as fixed percentages and dollar amounts in the contract.

• Stage 1, signing until Discovery is approved. Work done is 10 percent, leaving 90. The charge is 10 + 18 = 28 percent, or $3,360.
• Stage 2, Discovery approved, Design in progress. Work done is 20 + 15 = 35 percent, leaving 65. The charge is 35 + 13 = 48 percent, or $5,760.
• Stage 3, Design approved, Build in progress. Work done is 50 + 17.5 = 67.5 percent, leaving 32.5. The charge is 67.5 + 6.5 = 74 percent, or $8,880.
• Stage 4, Build approved, Launch in progress. Work done is 85 + 7.5 = 92.5 percent, leaving 7.5. The charge is 92.5 + 1.5 = 94 percent, or $11,280.

The first two stages land close to the Guild’s 25 and 50 percent ladder, and the last stays below 100 percent because only a small milestone is left to lose.

Now the cash. If the client cancels during Design, they owe $5,760 minus the $3,000 deposit already paid, which is $2,760. At Stage 1, the deposit covers all but $360 of the $3,360, so an early cancellation needs almost no collecting.

Compare a flat add-on in the AIGA style, work to date plus 25 percent of the total fee. At Stage 4 that is $11,100 of work (92.5 percent of $12,000) plus $3,000, or $14,100, more than the entire contract. If you borrow a percentage-of-total add-on, cap it at the project fee. A charge on the remaining balance, as above, can never exceed it.

How to Get a Client to Sign It

Clients sign kill fees that read like scheduling.

• Show dollar amounts, not formulas. “$5,760 if we stop during Design” is easy to agree to.
• Make the right to cancel mutual, as AIGA’s clause does, and say what you refund if you are the one who stops.
• Let payment buy something. Instead of the Guild’s rule that rights revert to the artist, give the client the approved work to date once the cancellation amount is paid.
• Raise it before the contract. Walk through the schedule on the sales call and in your client onboarding welcome packet, so the clause is familiar when they sign.

Three Kill Fee Clause Templates You Can Adapt

Each template assumes a scope of work that defines the Project Fee and milestones. Replace everything in brackets, and have a lawyer check the wording for your jurisdiction.

Template 1: Flat Kill Fee Plus Work to Date

Cancellation by Client. Client may cancel this Agreement for convenience at any time by written notice. Freelancer will stop work on receipt of the notice.

Payment on cancellation. Within [14] days of the notice, Client will pay (a) the fees for approved milestones plus [a prorated share of the milestone in progress / hourly fees at $[rate] per hour], (b) approved expenses already incurred, and (c) a cancellation fee of $[amount].

Reason. Freelancer has reserved [number] weeks for this project and declined other work to do so. The parties agree that Freelancer’s actual loss from a cancellation would be difficult to calculate, and that the cancellation fee is a reasonable estimate of that loss and not a penalty.

Cap and deposit. The total paid under this section, including payments already made, will not exceed the Project Fee. Any deposit is credited against the amounts above, and any excess is refunded within [14] days.

Work product. On full payment, Client will receive [the approved deliverables and work in progress], subject to the license terms of this Agreement.

A flat fee suits short projects where reserved time is the main loss. Keep it proportionate to that time.

Template 2: Percentage-by-Stage Cancellation Schedule

Cancellation schedule. Client may cancel this Agreement for convenience at any time by written notice. The amount due depends on the stage reached on the date Freelancer receives the notice:

Stage 1, from signing until [Milestone 1] is approved: [28]% of the Project Fee ($[amount]).
Stage 2, until [Milestone 2] is approved: [48]% ($[amount]).
Stage 3, until [Milestone 3] is approved: [74]% ($[amount]).
Stage 4, after [Milestone 3] is approved and before final delivery: [94]% ($[amount]).
After final delivery: 100% of the Project Fee.

Each amount reflects the work Freelancer expects to have completed at that stage plus a reasonable estimate of reserved time Freelancer cannot rebook at short notice. The parties agree these amounts are compensation and not a penalty.

All payments already made, including the deposit, are credited against the amount due. Client will pay any balance within [14] days of the notice, and Freelancer will refund any excess within [14] days.

On full payment, Client will receive [the approved deliverables and work in progress].

The bracketed percentages come from the worked example. Recalculate them for your own milestones and rebooking assumption.

Template 3: Notice Period for Retainers

Term. This retainer runs month to month from [start date] at $[amount] per month, invoiced in advance on the [1st] of each month.

Ending the retainer. Either party may end this retainer with [30] days of written notice. Client will pay the retainer fee for the notice period, and Freelancer will keep providing the services during it unless Client asks Freelancer to stop.

Payment in place of notice. If Client gives less than [30] days of notice, or asks Freelancer to stop during the notice period, Client will still pay the fee for the full notice period.

Ending by Freelancer. If Freelancer ends the retainer, Freelancer will give the same notice, and Client will pay only for the period in which services were provided.

A notice period is the retainer version of a kill fee: the client can always leave, just not overnight. For structuring the retainer itself, see Freelance Retainers Explained: How to Get Monthly Clients in 2026.

How to Invoke a Kill Fee Without Losing the Client

When a client cancels, send the invoice quickly, cite the clause, show the arithmetic and keep the tone flat. You want to be paid and still get the call when the project returns.

Subject: [Project name]: cancellation and final invoice

Hi [Client name],

Thank you for letting me know about the decision to stop [project name]. I understand priorities change, and I have paused all work as of [date].

Under section [number] of our agreement, cancellation during [stage] carries a charge of [percentage]% of the project fee, which is $[amount]. You have already paid $[amount paid], so the balance is $[balance]. The invoice is attached and is due by [date].

Once it is paid, I will send [the approved files and work in progress]. If the project restarts within [number] months, I will credit [amount] of this charge toward the new work.

Thank you for the work we did together. I would be glad to help again when the timing is right.

[Your name]

The restart credit is optional but gives them a reason to come back. If the invoice goes unpaid, follow How to Collect Unpaid Invoices as a Freelancer Without a Lawyer, and if needed, How to Write a Demand Letter for an Unpaid Invoice.

New York’s “Freelance Isn’t Free” Act and Your Cancellation Terms

In New York City, the written contract is not optional. The city’s Department of Consumer and Worker Protection states that “all contracts worth $800 or more must be in writing,” counting agreements with the same hiring party “that total $800 in any 120-day period.” The page also states that “the hiring party must pay you for all completed work,” within 30 days of completion if the contract gives no date, and that a freelancer paid late can collect double the unpaid amount plus attorneys’ fees and costs.

New York State’s version sits in Article 44-A of the General Business Law. Section 1412 requires the contract to include “the value of the services to be provided pursuant to the contract, and the rate and method of compensation,” plus the payment date. The hiring party must keep it for at least six years, and failing to maintain or produce it creates “a presumption that the terms that the freelance worker has presented are the agreed upon terms.”

Neither rule quoted here mentions kill fees by name. Our reading, which is analysis rather than agency guidance, is that a cancellation schedule is part of the rate and method of compensation, so it belongs in the signed contract in dollars, not in a later email. These laws protect independent contractors; if you are unsure whether you are one, read Independent Contractor vs Employee.

On Upwork, the Funded Milestone Is Your Kill Fee

The Upwork help pages cited here cover fixed-price contracts and describe project funds, formerly called escrow, not kill fees. Upwork’s Fixed-Price Payment Protection page warns: “If a milestone isn’t funded in advance, we can’t help recover payment later.” Protection also requires delivering with the Submit Work for Payment button, which “triggers the 14-day countdown for automatic payment,” and work that matches the milestone description.

If the client ends the contract and pays less than the funded milestone, you get a refund request, and Upwork’s dispute guide is blunt: “You have seven calendar days to review the payment details and submit a fixed-price dispute. If you do not submit a dispute within seven days, any remaining funds will be refunded back to the client.” The client then has five calendar days to respond, and silence releases the funds you requested. A decline goes to a mediation specialist for a non-binding resolution, and if either side rejects it, the final option is to purchase binding arbitration.

The refund request “applies to the remaining deposit, not to any funds you’ve already been paid.” So the practical kill fee on Upwork is structural: small milestones, each funded before you start it. Write your cancellation terms into the contract messages anyway, since a dispute asks for “the relevant milestone agreements,” but count on the funded milestone, not on a mediator.

On Fiverr, Cancellation Refunds the Client, So Use Partial Refunds

Under Fiverr’s cancellation rules for freelancers, clients “can request to cancel an active order at any time through the Resolution Center,” and you have 48 hours to accept or decline; if you do not respond, the order is automatically canceled. A client can also cancel without your approval before submitting requirements, or 24 hours past the expected delivery date with no agreed extension. A cancellation you request affects your Order Completion Rate. The money goes back to the client: Fiverr’s canceled-order refund guide says “we credit the funds to your Fiverr balance by default.”

The tool that works like a kill fee is the partial refund, which Fiverr says “allows the freelancer to be compensated for the work they’ve already completed while returning part of the payment to the client.” The rules are tight:

• Only the freelancer can offer it, and only on an active order over $50.
• The refund runs from $5 up to 60 percent of the original order price, so on a $200 order you can refund up to $120 and the order stays at no less than $80.
• Milestone orders qualify only for the first milestone, and each order allows one partial refund.
• The offer expires if the client does not respond within 3 days, and accepted or declined, it does not affect your Order Completion Rate.

When a Fiverr client wants out midway, offer a partial refund sized to the unfinished work before they reach for the cancel button. If they accept, the order keeps at least 40 percent of its original price, and Fiverr calculates your fee on that final price.

Conclusion

A kill fee is not a trap for clients. It is a price list for a decision the client controls, written while everyone still expects the project to finish. The models from AIGA, the Graphic Artists Guild and the NWU tie the money to work done and reserved time, and the penalty rule points the same way: a reasonable estimate, explained and capped.

Do this in order. Price your next project by milestone. Decide how much freed-up time you could realistically rebook, and turn that into a stage-by-stage schedule in dollars. Put it in the signed contract with a reason and a cap, and walk the client through it before they sign. On Upwork or Fiverr, rely on funded milestones and partial refunds instead.

Key Takeaways

• A kill fee is a pre-agreed cancellation payment, a term from freelance writing contracts that pay the author when the publisher declines to publish.
• No universal percentage exists: AIGA adds 25 percent of the project fee to work to date when the client cancels for convenience, the Graphic Artists Guild lists 25, 50 and 100 percent by stage, and the NWU’s Jacobin agreement pays 50 percent.
• Restatement (Second) of Contracts section 356 and UCC 2-718 treat unreasonably large liquidated damages as an unenforceable penalty, so tie your fee to work done and real lost opportunity.
• A charge on the unperformed balance never pushes the total past the contract price, but work to date plus 25 percent of the total fee can reach $14,100 on a $12,000 project.
• New York City requires a written contract for work worth $800 or more in any 120-day period, and state law requires it to state the rate and method of compensation.
• On Upwork you have seven calendar days to dispute a refund request, and on Fiverr only the freelancer can offer a partial refund, capped at 60 percent of the order price.

Frequently Asked Questions

What is a typical kill fee percentage?

There is no single standard. AIGA’s model design contract pays for work through the termination date plus an early termination fee of 25 percent of the total project fee when the client terminates for convenience. A Graphic Artists Guild checklist lists 25 percent upon assignment, 50 percent after sketch and 100 percent after final art. The National Writers Union’s Jacobin agreement pays 50 percent when assigned work is rejected without a request for revision. Build your own number from the work you will have done and the booked time you could not rebook.

Is a kill fee legally enforceable?

It can be, if the amount is reasonable. Under Restatement (Second) of Contracts section 356, damages may be liquidated only at an amount that is reasonable in light of the anticipated or actual loss and the difficulty of proving it, and an unreasonably large amount is unenforceable as a penalty. UCC 2-718 uses nearly the same test. Tie the fee to work done and reserved time, state that reason in the clause, cap it at the project fee, and have a lawyer in your jurisdiction review it.

What is the difference between a kill fee and a deposit?

A deposit is money paid before work starts, and it is security rather than a fee. AIGA’s guide says that if the project is canceled, the deposit is refunded less any amounts due to the designer. A kill fee is one of those amounts due. The two work best together: in this guide’s worked example, a $3,000 deposit covers all but $360 of a $3,360 early cancellation charge. If you want part of the deposit to be non-refundable, the contract has to say so.

Can I charge a kill fee on Upwork or Fiverr?

Not the way a private contract does. On Upwork fixed-price contracts, your protection is the funded milestone: if a client ends the contract and requests a refund of funds still held, you have seven calendar days to dispute or the remaining funds go back to the client. On Fiverr, a client can request cancellation of an active order at any time, and canceled funds are credited to the client’s Fiverr balance. The closest thing to a kill fee is a partial refund, which only the freelancer can offer, capped at 60 percent of the order price.

What should I do if a client cancels and refuses to pay the kill fee?

Send a calm invoice that cites the clause by section number, shows the stage and the arithmetic, credits what they already paid, and offers the work in progress on payment. If that goes unanswered, escalate with reminders and then a formal demand letter. In New York City, the consumer and worker protection agency states that hiring parties must pay for all completed work and that a freelancer paid late can collect double the unpaid amount plus attorneys’ fees. Everywhere, your position depends on the signed contract.