A cancellation clause protects your time and income if a client backs out of a project. Here's how to structure and invoice it fairly.
Why a kill fee matters
When you accept a project, you often turn down other work or reserve time specifically for it. A kill fee compensates for that opportunity cost if the client cancels.
Common structures
Some freelancers charge a flat percentage of the total project fee (e.g., 25-50%) if cancelled after a certain point; others scale the fee based on how much work was already completed.
Tie the fee to project stage
A common approach: a smaller kill fee if cancelled before work begins, and a larger one (or full payment for completed phases) if cancelled mid-project.
State it in your contract before work begins
A kill fee clause only works if it's agreed upfront, ideally in a signed contract or proposal — introducing one after the fact is far harder to enforce.
Invoice it clearly if triggered
If a cancellation occurs, invoice the kill fee as its own clearly labeled line item, referencing the relevant contract clause.
The bigger picture
A kill fee isn't about penalizing clients — it's a reasonable protection against lost opportunity when you've committed real time and turned down other work.