Payment Terms for Freelance Contracts: Net 15, Net 30, Deposits & Late Fees

Your payment terms are decided on the day you agree to the work — not on the day the invoice is due. If the contract is silent on when and how you get paid, you're negotiating from a weak position every single time. Here's the short list of terms every freelance contract needs, plus ready-to-use wording.

The four terms that matter

• The exact amount — itemized by deliverable or milestone, in one currency, including any tax.
• The due date — stated as a specific date or as Net 15 / Net 30 from the invoice date.
• The late fee — a monthly percentage, a grace period, and a cap (see below).
• The deposit or retainer — an up-front percentage for new clients or large projects.

Net 15 vs Net 30 vs milestone billing

Net 30 is the industry default but it's slow for cash flow. Net 15 is a good middle ground for most freelancers. Milestone billing — 50% up front, 50% on delivery — is best for large projects because it keeps risk low and cash moving. Whatever you choose, write it in the contract and repeat it on the invoice.

Writing a late fee clause that holds up

A reasonable, stated-in-writing late fee is enforceable and fair. Standard wording: "Invoices unpaid 3 days past the due date accrue a late fee of 1.5% per month, capped at 15% of the invoice amount." Apply it consistently — a fee you never enforce teaches clients it's optional.

Deposits and retainers

For new clients, ask for 50% up front and apply it to the final invoice. For ongoing work, a retainer covers a set number of hours each month and protects you from scope creep. Both are standard practice — the only mistake is not asking.

The terms only work if they show up in the right places. Freelancer CashFlow puts your terms and late fee on every invoice automatically, tracks retainers against invoices, and bills recurring work on schedule — so the agreement you signed is the payment you collect.