A client cancelled a project halfway through. No fault of mine. Just changed direction. I had turned down other work for this. Lost $4,000 in expected revenue. Do you include a kill fee for mid-project cancellations? How much is fair?

I include a 50% kill fee for cancellations after kickoff. It is in the contract upfront. Nobody has pushed back because it is standard in my industry. The key is mentioning it before they sign, not after they cancel.

I do not use a kill fee. I use milestone payments. 25% at kickoff, 25% at midpoint, 50% at delivery. If they cancel after midpoint, I keep what I earned. No awkward kill fee conversation needed.

Milestone payments are cleaner. I am switching to that structure. The kill fee feels punitive. Milestones feel fair. Same protection, different psychology.

I use both. Milestones for cash flow. Kill fee for protection if they cancel before midpoint. Belt and suspenders. Overkill for some clients. Peace of mind for me.

I looked into this a lot and make sure to include it with my services. I state that 25% is not refundable. If the project is 70% or more complete, then there are no refunds for deciding to walk away. I don't want to put time and energy into something and risk not getting paid at all.

22 hours ago, Rege92 said:

I looked into this a lot and make sure to include it with my services. I state that 25% is not refundable. If the project is 70% or more complete, then there are no refunds for deciding to walk away. I don't want to put time and energy into something and risk not getting paid at all.

I have heard of people doing similar to this but their cutoff point for no refunds was 50% completion. I think this model is a bit more fair in that you guarantee yourself 25% of the cost so if a client flakes out, you don't lose anything but on their end you have to reach 70% to say no refunds.

On 6/29/2026 at 9:32 AM, xJamesQ said:

I have heard of people doing similar to this but their cutoff point for no refunds was 50% completion. I think this model is a bit more fair in that you guarantee yourself 25% of the cost so if a client flakes out, you don't lose anything but on their end you have to reach 70% to say no refunds.

I have had one too many experiences where I would get a good amount of the work done and a client decides they want something different or they want to work with someone else. I have lost hours of paid work before I started doing this.