Net 15, Net 30 or Due on Receipt? How to Choose Freelance Payment Terms
Net 15, Net 30, due on receipt, deposits, milestones. Learn what each freelance payment term means and how to pick the one that protects your cash flow.
Payment terms decide when you get paid, and most freelancers pick them by accident. They copy whatever the last client asked for, then wonder why money arrives six weeks after the work does.
Terms are a negotiation, but you set the starting point. Here is what the common ones mean and how to choose.
What the terms mean
Due on receipt. Payment is due as soon as the invoice is delivered. It sounds firm, but in practice many clients treat it as "pay soon." It works best for small projects and clients who pay by card or app.
Net 7, Net 15, Net 30. "Net 30" means the full amount is due 30 days after the invoice date. Net 15 means 15 days, and so on. The number counts from the date on the invoice, not the date the client opened it, so send invoices promptly.
Net 60 or Net 90. Some larger companies ask for these. They are common in corporate payment systems, but they are hard on a freelancer's cash flow. You can often negotiate down, or ask for a deposit to offset the wait.
50% upfront, 50% on delivery. A deposit plus a final payment. This is very common for projects and protects both sides: the client sees commitment, and you aren't working entirely on credit.
Milestone payments. The fee is split across stages, such as 30% to start, 40% at first draft and 30% at delivery. This suits long or large projects.
Retainers. A fixed amount per month for an agreed amount of work. This gives you predictable income and gives the client reserved access to you.
How to choose
Ask three questions:
- How big is the project? Small, short jobs can be due on receipt or Net 7. Large or long jobs should be split into a deposit and milestones.
- How well do you know the client? A new client with no history is a good reason for a deposit. A client you have worked with for years may earn longer terms.
- How much cash cushion do you have? If one unpaid invoice would cause trouble, favour shorter terms and more upfront money.
A common starting point for new project clients is 50% upfront, balance due Net 15 after delivery. Adjust from there.
Put it in writing, twice
State your terms in your contract and on each invoice. The contract sets the expectation ("a 50% deposit is required to begin work"), and the invoice repeats it ("Balance due within 15 days of invoice date"). Don't rely on an email thread you'll need to dig up later.
Make it easy to pay, too. Show every payment method you accept on the invoice itself. Payment apps and services have their own rules and fees, so check what each charges and whether you need a business profile to accept business payments with it.
What about late fees?
Some freelancers add a late fee, such as a percentage per month on overdue balances. If you do:
- Put it in the contract before work starts, and repeat it on the invoice.
- Keep it reasonable. The rules on what you can charge vary by location, so check yours.
- Decide in advance whether you'll actually enforce it. A late fee you never apply teaches clients to ignore it. Sometimes a polite reminder is the better tool.
Sample wording for an invoice: "Payment is due within 15 days of the invoice date. Balances unpaid after the due date may be subject to a late fee as described in our agreement."
Handling pushback
If a client asks for longer terms than you want, try one of these before saying yes:
- Offer a discount for early payment, such as a small percentage off if paid within 10 days.
- Ask for a deposit so you are not funding the whole wait.
- Shorten the project's payment stages so each invoice is smaller.
- Agree to the longer term for the final payment only, while keeping the deposit and first milestone short.
You are the one doing the work. Reasonable clients understand that you need to be paid in a reasonable time.
Keep your terms consistent
Once you have terms you like, use them every time. A consistent default saves you from re-negotiating on every project, and it makes your invoices look professional. Tools like PeerInvoice let you create an invoice with a clear due date and share it through one link, so the client sees exactly what you agreed on.
Pair your terms with a solid agreement. Our freelance contract template includes payment terms and a kill fee, and our change order template helps when the scope grows mid-project.
This article is general information for freelancers, not legal or financial advice. Rules about late fees and payment terms vary by location.