Payment terms for UK freelancers: a complete guide
The terms you set before a project starts determine how quickly you get paid after it ends. Here is how to get them right.
Why payment terms matter
Payment terms are the most boring thing you will ever read about freelancing, and also one of the most important. The terms you agree to before a project starts define when you get paid, what happens if they are late, and what leverage you have if things go wrong.
Most freelancers don’t think about terms until they are already chasing an invoice. By then it is too late. You are negotiating from a position of weakness. The work is done, the client has what they wanted, and you are the one waiting for money.
Good terms don’t guarantee you will get paid on time. No piece of paper can do that. But they remove every excuse for not paying you. When you have clear, written terms that the client agreed to before work started, chasing a late invoice becomes a straightforward conversation: “We agreed to Net 14. It has been 21 days. When can I expect payment?” Without terms, you are left saying “Can you please pay me?” That is a much weaker position.
The time you spend getting your payment terms right is an investment that pays for itself on every single project.
Common payment terms explained
Before you can choose the right terms for your work, you need to understand what the options actually mean. Here is a breakdown of the most common payment terms you will encounter as a UK freelancer.
| Term | What it means | Typical use |
|---|---|---|
| Due on receipt | Payment expected immediately when the invoice is received | Small projects, ongoing retainers |
| Net 7 | Payment due within 7 days of the invoice date | Quick turnaround work |
| Net 14 | Payment due within 14 days | Common for small–medium projects |
| Net 30 | Payment due within 30 days | Industry standard, larger clients |
| Net 60 | Payment due within 60 days | Large corporates, agencies |
| 50% upfront | Half before work starts, half on completion | Larger projects, new clients |
| Milestone payments | Payments tied to project stages | Long-term projects |
| End of month | Payment at the end of the month the invoice is received | Retainer clients |
“Net” simply means the number of calendar days from the invoice date. So Net 30 means 30 days from the date on the invoice, not 30 working days. A common mistake is assuming “Net 30” means a month. If your invoice is dated 15 January, payment is due 14 February, not 28 February.
The legal default if you don’t specify terms
If you don’t specify payment terms, UK law steps in. Under the Late Payment of Commercial Debts Act 1998, the default payment period is 30 days from either the date the invoice is received or the date the goods or services are delivered, whichever is later.
Relying on the legal default is a weak position. When you don’t set explicit terms, you are leaving it to the client to decide when they think payment is due. Some will interpret “no stated terms” as “pay whenever you feel like it.” Having clear, written terms removes that ambiguity entirely.
Statutory interest on late payments
If a commercial invoice is paid late, you are entitled to charge statutory interest at 11.75% per year (8% + the Bank of England base rate of 3.75%). You are also entitled to fixed compensation: £40 for debts under £1,000, £70 for debts between £1,000 and £10,000, and £100 for debts over £10,000. These are your rights under existing law. You don’t need a contract clause for them to apply, but including one makes your position stronger.
The bottom line: don’t rely on the legal default. Set your own terms, put them in writing, and get your client to agree before you start work. It takes five minutes and saves you weeks of uncertainty later.
Recommended terms by project type
There is no one-size-fits-all answer to “what payment terms should I use?” The right terms depend on the size of the project, your relationship with the client, and the industry you work in. Here are practical recommendations for the most common scenarios.
Small one-off projects (under £500)
Due on receipt or Net 7. Don’t wait 30 days for a small job. Send the invoice as soon as the work is delivered and expect prompt payment. For very small jobs (£100–£200), due on receipt is perfectly reasonable. The client knows the amount upfront and there is no reason to delay.
Medium projects (£500–£5,000)
50% upfront, balance on completion (Net 14). The deposit shows commitment and reduces your risk. If the client goes silent halfway through, you are not completely out of pocket. Net 14 on the balance is reasonable, since they have already seen the work and know what they are paying for.
Large projects (£5,000+)
Milestone payments. Break the project into 3–4 phases with a payment at each milestone. A typical split: 30% upfront, 30% at the midpoint, 30% on delivery, and 10% on final sign-off. This keeps cash flowing throughout the project and limits your exposure if things go sideways.
Retainer or ongoing work
Monthly invoicing, Net 14 or end of month. Set up a regular schedule so both sides know what to expect. Invoice on the same day each month and make it clear when payment is due. Predictability is your friend. It makes chasing much easier because there is no ambiguity about when the money should arrive.
Agency subcontracting
Try for Net 30, expect pushback for Net 60. Agencies often impose their own payment terms, and they tend to be longer than what you would agree with a direct client. Push back if they try for Net 90+. That is three months of free credit you are giving them. If they insist on longer terms, ask for a larger deposit or retainer to offset the wait.
Example wording you can copy
Here are ready-to-use clauses you can drop into your contracts, proposals, or invoices. Adjust the numbers in square brackets to suit your situation.
Basic payment terms
“Payment is due within [14/30] days of the invoice date. Invoices will be sent via email on completion of the work.”
With late payment clause
“Payment is due within [14/30] days of the invoice date. Late payments will incur statutory interest at 8% plus the Bank of England base rate per year under the Late Payment of Commercial Debts (Interest) Act 1998, plus fixed compensation for recovery costs.”
Deposit terms
“A non-refundable deposit of [50%/£X] is required before work begins. The balance is due within 14 days of project completion.”
Milestone terms
“This project will be invoiced in stages: [30]% on agreement, [30]% on [milestone], [30]% on delivery, and [10]% on final sign-off. Each invoice is due within 14 days.”
Kill fee clause
“If the project is cancelled after work has begun, you agree to pay for all work completed to date plus [25]% of the remaining project value.”
Tip
You don’t need fancy legal language. Clear, plain English is perfectly valid in a contract. The goal is for both sides to understand exactly what has been agreed. If your wording is so complicated that neither of you is sure what it means, it is not protecting anyone.
Negotiating payment terms
Most freelancers accept whatever terms the client offers without question. That is a mistake. Payment terms are negotiable, just like your rate, your scope, and your timeline. Here is how to approach the conversation.
Start with what you want, not what you think they will accept
If you want Net 14, ask for Net 14. Don’t pre-compromise to Net 30 because you assume they will push back. You might be pleasantly surprised. And if they do negotiate, you will land somewhere better than if you had started at 30.
Push back on “standard” terms
Large clients will try to impose their standard terms. The word “standard” makes it sound non-negotiable, but it almost never is. Their procurement department deals with vendors of all sizes and flexibility levels. You can push back, especially on payment timelines.
Never agree to “pay when paid”
Some agencies will try to tie your payment to when they get paid by their client. These clauses are unfair and may be unenforceable under UK law. Your contract is with the agency, not their client. Their cash flow problems are not your responsibility.
Trade longer terms for a larger deposit
If they insist on Net 60+, ask for a larger deposit to compensate for the wait. “I’m happy to work with Net 60 on the balance if we can agree on 50% upfront” is a reasonable compromise that protects your cash flow.
Get it in writing before work starts
A verbal agreement is legally binding in the UK, but it is much harder to prove. An email exchange, a signed proposal, or a simple contract all count as written evidence. Don’t start work until the terms are documented somewhere.
Treat reluctance as a red flag
If a client refuses to discuss payment terms at all (or gets evasive when you bring it up), that tells you something important about how they handle money. Clients who are serious about working with you will have no problem agreeing to clear, fair terms.
Deposits and milestone payments
If there is one piece of advice that comes up again and again from experienced freelancers, it is this: get money upfront. A deposit is the single most effective way to protect yourself against non-payment, and milestone payments keep cash flowing on longer projects.
Why deposits matter
A deposit does three things at once. First, it proves commitment: a client who pays upfront is far less likely to disappear or drag their feet. Second, it reduces your risk: if the project falls apart, you are not completely out of pocket. Third, it improves your cash flow: you have money coming in before you do the work, not weeks or months after.
When to insist on a deposit
You should ask for a deposit whenever possible, but there are situations where it is particularly important:
- New clients: You have no track record with them. A deposit tests whether they are serious and reliable.
- Large projects: Anything over £1,000 should involve some upfront payment. The bigger the project, the more you stand to lose.
- Clients with no track record: Startups, brand-new businesses, or anyone you cannot find a payment history for. Better to be cautious.
- Projects with significant upfront effort: If you need to invest heavily in research, planning, or setup before delivery, a deposit ensures that work is covered.
How much to charge
25–50% is standard for most freelance work. For smaller projects, 50% is common. For larger ones, 25–30% is more typical, especially if you are also using milestone payments. There is no rule that says it has to be a round percentage. If the project is £3,000, asking for £1,000 upfront is perfectly fine even though it is 33%.
Structuring milestone payments
For projects that run over several weeks or months, milestone payments break the total cost into manageable stages. Each milestone should be tied to a clear, measurable deliverable, not a vague concept like “phase 2 complete.” Examples of good milestones include: wireframes approved, first draft delivered, beta version tested, or final files handed over.
A common issue with milestones is sign-off delays. The client takes three weeks to review something, and your payment is held up. Protect yourself by adding a clause like: “If sign-off is not provided within 14 days, the milestone will be considered approved and the invoice will be issued.” This prevents indefinite delays from blocking your income.
When your payment terms are ignored
You set clear terms. The client agreed to them. And then they pay at Net 60 instead of Net 30. Or they agree to milestones but keep delaying sign-off to push back payments. It happens, and it is frustrating. Here is how to handle it.
If you have exhausted the friendly options and the client still will not pay, read our full escalation guide for when a client won’t pay. It covers everything from Letter Before Action to small claims court.
It is also worth knowing that the UK government has proposed new legislation in 2026 that would cap payment terms at 60 days for large businesses and introduce fines for persistent late payers. Our UK late payment laws 2026 guide covers what is changing and what it means for your terms.
Frequently asked questions
Related guides
This guide is for informational purposes only and does not constitute legal advice. For complex contractual matters, consider consulting a solicitor.
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