You cleared your schedule, started the work, and then the email comes: "Sorry, the project is on hold indefinitely. We won't be needing the rest of the work."
Without a "Kill Fee" (Termination Fee) in your contract, you might have just worked for free.
1. What is a Kill Fee?
A kill fee is a predetermined amount a client must pay if they cancel a project before completion. It compensates you for the "Opportunity Cost"—the other clients you turned down to make room for this one.
2. How to Structure Your Kill Fee
The most common ways to calculate this are:
- Percentage of Remaining Work: e.g., "If canceled, client pays 50% of the remaining project fee."
- Milestone Payout: You keep the deposit and are paid for the current phase in full.
- Flat Fee: A specific "Kill Fee" of $[Amount] listed in the payment terms.
3. Enforcing It
If the project is "killed," immediately send an invoice for the Kill Fee. If the client argues, refer them to the specific clause in your signed agreement. If you aren't sure if your current contract has a "Termination for Convenience" trap, scan it now with our AI engine.
Frequently Asked Questions (FAQ)
Is a deposit the same as a kill fee?
Not exactly. A deposit is paid upfront to start. A kill fee is an additional penalty for canceling. However, many freelancers use a "Non-Refundable Deposit" as their de facto kill fee.
What if the client cancels because they don't like the work?
This is a "Termination for Cause." If your contract has a satisfaction clause, they might try to avoid the kill fee. This is why you must define "Acceptance" clearly in your documents.
Can I still use the work if the client pays a kill fee?
Usually, yes. Unless the contract says otherwise, if the client doesn't pay for the final work, they don't own the copyright. You can often repurpose that work for another project or your portfolio.