Kill Fee / Cancellation Fee

A kill fee (also called a cancellation fee) is a contractual clause that protects you when a client pulls the plug on a project mid-stream. It specifies a percentage of the total project fee — typically 25% to 50% — that the client must pay if they cancel after work has started, regardless of whether the final deliverable is completed.

Kill fees exist because when you commit to a project, you're not just investing time in that project — you're also turning away other work. If you block out three weeks for a $10,000 website build and the client cancels after week one, you've lost both the income from that project and the income you could have earned from other clients during those weeks. A kill fee compensates for that double loss.

Most kill fees are structured as a tiered percentage: 25% if cancelled before work begins (compensating for opportunity cost and scheduling), 50% if cancelled during production (compensating for work done), and 100% for work completed but not accepted. Some freelancers use flat cancellation fees instead of percentages, especially for smaller projects. The key is that the terms are agreed upon before work starts — never after a cancellation happens.

Without kill fees, you're exposed to significant financial risk every time you take on a project. Clients cancel for all sorts of reasons — budget cuts, leadership changes, strategic pivots, internal politics — and most of them have nothing to do with your work quality. If you've turned down three other projects to take this one, and the client cancels a week in, you need protection. Kill fees don't prevent cancellations, but they ensure you're compensated fairly when they happen. They also signal professionalism — established agencies and publications have used kill fees for decades.