What Is a Kill Fee?
A kill fee is the amount a client owes when they cancel a project before it finishes. It compensates for work already done and for the capacity you held open and can no longer sell, and it is agreed in the contract rather than negotiated after the cancellation email arrives.
The term comes from publishing, where a commissioned article that never ran still had to be paid for. Agencies and freelancers use it the same way for cancelled campaigns, shelved rebrands, and builds killed by a change of leadership.
What a kill fee typically covers
Two things, and being explicit about both is what makes the clause hold. The first is work completed to the cancellation date, which is straightforward to evidence if hours are tracked against the project. The second is the booked capacity you turned other work away for, which is the part clients push back on and the part that actually costs you.
Common structures run 25% to 50% of the remaining fee, on top of payment for completed phases. Sliding scales are cleaner in practice: a higher percentage early, when you have blocked out weeks and delivered little, and lower later, when most of the fee has already been earned through delivered phases.
Phase-based work simplifies this considerably. If the project bills at the end of discovery, design, and build, cancellation mid-phase only leaves one phase in dispute. The statement of work is where that structure gets set.
Kill fee vs deposit vs cancellation clause
A deposit is money taken up front and set against the final invoice. It protects you against a client who never pays, and it filters out buyers who were never serious. It is not compensation for cancellation unless the contract says it is non-refundable, which is a separate sentence people often assume rather than write.
A cancellation clause names the notice period and the process. A kill fee names the money. Many agreements need both, since notice without a fee lets a client walk after thirty days having paid for delivered work only, leaving your following month empty.
For ongoing work the equivalent protection is the notice period in a retainer agreement, which does the same job across a rolling arrangement rather than a fixed project.
Writing the clause so it gets paid
Four elements. Name the trigger, meaning what counts as cancellation, including indefinite postponement. Name the amount as a formula rather than a figure, so it scales with where the project stopped. Name what the client receives, since paying a kill fee and getting nothing feels punitive and invites an argument. And name the payment terms, because a kill fee invoice with no due date is the one that ages the longest.
The evidence matters as much as the wording. A clause priced against hours delivered needs those hours to exist somewhere defensible, logged as the work happened rather than reconstructed from memory the week after cancellation.
Where a cancelled project leaves you holding unbilled work, that balance is work in progress, and it is worth invoicing promptly rather than waiting for the relationship to cool further.
Kill fee vs adjacent contract terms
| Term | What it does |
|---|---|
| Kill fee | Compensation owed when a project is cancelled part-way |
| Deposit | Money up front, set against the final invoice unless stated non-refundable |
| Cancellation clause | The notice period and process for ending the engagement |
| Notice period | The retainer equivalent, giving you time to replace the revenue |
| Change order | Prices added scope; nothing to do with cancellation |
Frequently asked questions
What is a kill fee?+
A kill fee is the amount a client owes when they cancel a project before it finishes. It covers work already completed and the capacity you held open and can no longer sell. It is agreed in the contract in advance rather than negotiated after the cancellation.
How much should a kill fee be?+
Common structures run 25% to 50% of the remaining fee, on top of payment for completed phases. A sliding scale works better in practice: higher early, when weeks are blocked out and little has been delivered, and lower later, when most of the fee has already been earned.
What is the difference between a kill fee and a deposit?+
A deposit is money taken up front and set against the final invoice. A kill fee is compensation for cancellation. A deposit only doubles as cancellation protection if the contract explicitly says it is non-refundable, which is a separate sentence that often gets assumed rather than written.
How do you write a kill fee clause?+
Name the trigger including indefinite postponement, express the amount as a formula rather than a figure so it scales with where the project stopped, name what the client receives for the payment, and set the payment terms. Back it with hours logged as the work happened rather than reconstructed later.
Do freelancers use kill fees?+
Yes, and the case is stronger for a freelancer than an agency, because a solo practice cannot redeploy blocked capacity to another project at short notice. The clause matters most where a project required turning other work away.
Should the client get the work if they pay a kill fee?+
Say either way in the contract. Handing over completed work makes the fee feel like payment rather than a penalty, which makes it far more likely to be paid without argument. Withholding it is defensible where the deliverable would be usable without the remaining phases.
Related calculators & guides
Work the same numbers from the next angle.
Statement of Work (SOW) Template
Scope, deliverables, timeline and pricing for one project — the contract a proposal becomes.
Open toolRetainer Agreement Template
Monthly fee, included hours, rollover rule, scope boundary and notice period for ongoing work.
Open toolWIP / Unbilled Revenue Calculator
Total the work you've delivered but not yet invoiced — the money sitting between done and paid.
Open toolHow to collect a discovery deposit before work starts
The booking-to-invoice workflow that gets a deposit cleared before your team touches the project.
Read the guideWhat Is a Change Order?
What a change order is, and how it differs from scope creep.
Open toolWhat Is a Rate Card?
The published price per role that every quote is built from. What goes on one, and when to quote a project fee instead.
Open toolEvidence the hours before you need them.
A kill fee priced against work delivered needs hours that exist somewhere defensible. Ascend logs time against the project as it happens, so the record is already there. The free tier covers one client end to end.
Start with Ascend free