Payment Terms Cheat Sheet
The one-page reference for freelancers. What terms to use, how to word them, red flags to watch for, and when to require deposits.
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1. Recommended Terms by Project Type
| Project Type | Terms | Net | Why |
|---|---|---|---|
| Small projects (under $1,000) | 100% upfront or 50/50 | Due on receipt | Not worth the risk of chasing a small amount. Get paid before or at delivery. |
| Medium projects ($1K–$5K) | 50% deposit + 50% on delivery | Net 15 | Deposit covers your time if the client disappears. Short net terms keep cash flowing. |
| Large projects ($5K–$20K) | 30% deposit + milestones | Net 15–30 | Milestones protect both sides. You get paid as you deliver; the client pays for verified work. |
| Enterprise / agency ($20K+) | 20–25% deposit + monthly milestones | Net 30 | Larger companies need Net 30 for internal AP. Compensate with a deposit and monthly billing. |
| Retainers / ongoing | Monthly prepay | Due 1st of month | Retainers should always be prepaid. You're reserving time — the client pays for availability. |
| Rush / expedited work | 100% upfront + rush premium | Due on receipt | Rush work disrupts your schedule. Full prepayment eliminates the risk of rearranging your calendar for nothing. |
2. How to Word Your Terms
Standard Net 30
“Payment is due within 30 days of the invoice date. Payment received means funds have cleared in the Service Provider's bank account.”
Deposit requirement
“A non-refundable deposit of [50%] of the total project fee is due upon signing. Work will not commence until the deposit is received.”
Milestone payment
“Payment for each milestone is due within 5 business days of milestone approval. Milestones not responded to within 5 business days are deemed approved.”
Late fee clause
“Invoices not paid within 5 business days of the due date will incur a late fee of 1.5% per month on the outstanding balance.”
Work pause clause
“The Service Provider reserves the right to pause all work if any invoice remains unpaid for more than 7 days past the due date.”
Accepted payment methods
“Payment may be made via bank transfer (ACH), credit card, or PayPal. The Client is responsible for any transaction fees imposed by the Client's payment processor.”
3. Red Flags in Client Contracts
4. When to Require Deposits — Decision Guide
New client, no track record
Always require a deposit (50% minimum)You have no data on their payment behavior.
Returning client, pays on time
Deposit optional, Net 15 is fineThey've earned trust with consistent behavior.
Returning client, pays late
Require deposit (25–50%)Past behavior predicts future behavior.
Project requires subcontractors
Always require deposit to cover sub costsYou shouldn't front other people's costs.
Client asks for Net 60+
Require larger deposit (40–50%)Compensate for the longer payment window.
Rush or expedited project
100% upfrontYou're rearranging your schedule — no room for payment risk.
Project over 2 months
Deposit + monthly milestone paymentsNever go more than 30 days without a payment event.
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