You quoted a project, cleared your schedule for it, turned down other work to fit it in, and started delivering. Then the client changes direction — a budget freeze, a reorg, a new stakeholder who wants something else entirely — and the project is dead. The work you’d done is real. The time you’d reserved is gone. And unless you planned for this moment, you’re looking at billing for a fraction of what the cancellation actually cost you, or nothing at all.
This is one of the most common ways solo businesses lose money, and it’s almost entirely preventable. The tool is a kill fee. A kill fee is an agreed amount, set in the contract before work starts, that the client owes if they cancel a project you’ve committed to. It’s standard practice in design, writing, and consulting, and there’s no reason it shouldn’t be in yours.
A kill fee is a cancellation charge you agree up front, so a client who pulls out mid-project still pays for the time you committed and the work you’d started. Write it into the contract as a percentage tied to how far the work has progressed, take a deposit so you’re never chasing from zero, and frame it as fairness rather than a penalty. Most clients accept it without blinking.
Why “just bill for what you did” isn’t enough
The obvious response to a cancellation is to invoice for the hours worked and move on. But that quietly undercharges you, because the real cost of a cancelled project is bigger than the hours logged.
When you take a project, you don’t just spend the time on it — you reserve time for it, and you turn down other work to protect that space. If a four-week project dies in week two, you can’t always backfill weeks three and four; that capacity is simply lost, and the gap comes straight out of your financial buffer. Billing only for completed hours makes the client’s change of mind entirely your problem, when it was their decision. A kill fee shares that cost fairly, which is exactly what it’s for.
How much should a kill fee be?
The cleanest kill fees scale with how far the project has gone, so the charge always feels proportionate:
- Before work begins, after the slot is booked: a flat percentage of the fee — often 10–25% — covering the time you reserved and the other work you declined. This is where a deposit does its job.
- Partway through: the greater of the work completed to date or a set percentage of the total — commonly around 50% at the midpoint. The client pays for progress or for the disruption, whichever is larger.
- Near completion: most or all of the fee. If you’ve delivered 80% of the work, a cancellation shouldn’t let the client walk away paying 30%.
You don’t need all three tiers. A single clear line — “if the project is cancelled after work has begun, 50% of the total fee is due” — is far better than nothing, and simple enough that no one argues about interpretation later.
Anchor it with a deposit
A kill fee is a promise to pay; a deposit is money already in hand. Together they’re much stronger than either alone. If you’ve taken 40% up front and your contract says a mid-project cancellation triggers a 50% fee, you’re chasing 10% rather than the whole thing — and you’re negotiating from a position of holding funds, not asking for them.
If you’re not already taking deposits, start there. Should you ask for a deposit? walks through the case and how to raise it without friction. The kill fee then becomes the natural back half of the same conversation: the deposit protects the start, the kill fee protects the middle.
How to raise it without scaring the client
The word “fee” makes people flinch, so lead with the logic, not the charge. A kill fee isn’t a penalty for the client — it’s what lets you say yes to their timeline in the first place. You reserve the weeks, decline other work, and start delivering on the strength of the commitment; the clause simply means that commitment runs both ways.
A line like this does the work: “Because I block out dedicated time for your project and turn down other work to protect it, cancellations after we start are charged at 50% of the remaining fee. It’s rarely needed — it just keeps things fair for both of us if plans change.”
Framed that way, most clients agree readily, because it’s plainly reasonable. The ones who push back hard on a fair cancellation term are often telling you something useful about how they’d behave if things went wrong — which is worth knowing before you clear your schedule for them.
Put it in writing before the work starts
A kill fee only works if it exists before it’s needed. Agreed after a client has already tried to cancel, it’s just an awkward request. Written into the contract they signed, it’s a term they accepted — and that difference is everything when the money’s actually on the line.
Make it a standard clause in every project agreement, alongside your scope, timeline, and payment terms — contracts for clients you never meet covers the rest of what that agreement should hold. It costs a signed client nothing, because the term only ever activates if they cancel. It’s insurance you hope never to claim, priced at a single sentence.
Frequently asked questions
Is a kill fee the same as a deposit?
No. A deposit is money paid before work starts, while a kill fee is an amount owed only if the client cancels. They work best together: the deposit is already in hand, so a cancellation means invoicing the difference between it and the kill fee rather than chasing the whole sum from scratch.
Can I charge a kill fee if it isn’t in the contract?
You can ask, but without an agreed clause the client has no obligation to pay it. What you can still invoice is the work genuinely completed up to the cancellation, ideally backed by tracked time and delivered files. That’s why the clause belongs in every agreement before work begins, not after plans change.
What if the client cuts the scope instead of cancelling?
Treat a large reduction in scope like a partial cancellation. If a client halves a project after you’ve reserved the time, the same logic applies to the part that disappeared. A clause covering “cancellation or material reduction in scope” handles both, and handling scope creep covers the opposite problem.
Does a kill fee apply if I’m the one who ends the project?
No — a kill fee protects you from the client’s decision to cancel, so it doesn’t apply when you walk away. If you end the engagement, you’d normally bill only for work completed and honour any notice period. Ending a client relationship covers how to do that cleanly.
Where Billable comes in
The moment a project is cancelled is a bad time to be working out what you’re owed and how to bill it. You want the deposit already recorded, the work-to-date visible, and a clean invoice out the door while the conversation is still fresh.
Billable gives solo businesses that clarity: deposits and payments tracked against each project, invoices raised in minutes, and overdue amounts chased automatically so a cancellation fee doesn’t turn into a second thing you have to nag about. When plans change on the client’s side, the money side stays in order on yours. Take a look.