Kill Fee
Payment due when a client cancels a project after work has begun.
Definition
A kill fee is a payment owed to a service provider when a client cancels or terminates a project before completion. It compensates for work already performed, opportunity cost of reserved capacity, and resources already committed.
Kill fees are typically structured as either payment for work completed plus a percentage of the remaining contract, or a fixed percentage of total contract value. They're common in creative industries, consulting, and anywhere significant capacity is reserved.
Why It Matters
Kill fees protect against last-minute cancellations after you've turned away other work, invested in a project, or made commitments based on expected revenue. Without them, clients can cancel with little consequence while you bear all the risk.
Kill fee terms should be clear in contracts before work begins. When cancellations happen, having agreed-upon terms prevents contentious negotiations about what's owed.
Examples
- 1
A photographer's kill fee: if a shoot is cancelled within 48 hours, 50% of the quoted fee is still due.
- 2
A consulting contract specifies: on cancellation, client pays for work completed plus 25% of the remaining contract value.
- 3
A creative agency's kill fee covers reserved capacity: if a project is killed after scheduling, client pays the deposit (which was 30%) plus additional for work completed.
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