Deposits for creative work do two jobs: they lock a client into the booking and they fund the early stages of a project before any final files leave your hands. The strongest setup pairs an upfront deposit with milestone payments tied to creative stages, plus a kill fee that scales with progress if the client cancels. Under Australian consumer law, each charge holds up best when it reflects genuine cost or loss.
That last sentence is where most online advice falls over. The templates and platform blogs that dominate search results tend to be written for an American audience, and they cheerfully suggest big "non-refundable" deposits without a word about how Australian regulators view them. This article covers the practical side (how much, when, and how to word it) and the legal reality check that sits behind it.
Creative income rarely behaves. A commission lands, then nothing for six weeks. A wedding season stacks up shoots, then the diary goes quiet. Royalties trickle in on someone else's schedule.
Many creatives work freelance or run their own practice. Without a steady wage behind them, a single client who cancels late or pays slowly can wreck a quarter.
Slow payment is the other half of the problem. Anyone who has invoiced a client on delivery and then waited weeks for the money knows the pattern.
A payment schedule is the fix. Money that arrives at the start and at each stage of a project tends to smooth out the peaks and troughs, and it moves the risk of an unpaid job off the creative and back onto the client who commissioned it. Billing everything on completion generally means the creative carries the whole project on their own cash until the client pays.
Start with what the deposit is for. Consumer Affairs Victoria's guidance on unfair contract terms draws a useful line between two kinds of upfront payment (Consumer Affairs Victoria, 2011):
A holding deposit is paid to secure the booking and show the client is committed. The guidance suggests it should normally be a small percentage of the total price.
A cost-covering deposit pays for costs the supplier expects to incur early, such as materials, venue hire, printing or a second shooter. The guidance suggests it should not exceed those likely costs, and that any excess should be refunded if the job falls over.
That guidance comes from a Victorian regulator and was written with tourism businesses in mind, so treat it as one regulator's interpretation of the national Australian Consumer Law (ACL) rather than a fixed national rule. Even so, it is the clearest official framing available, and it is most relevant to creatives selling to the public: wedding and portrait photographers, pet and portrait commissions, private music teachers and bands taking private gig bookings.
Deposits that reflect genuine costs and reserved time are generally easier to justify, depending on your circumstances. A brand designer who blocks out three weeks and turns away other work has a genuine cost in that reserved time. A muralist who buys paint and hires a scissor lift has a genuine cost in materials and equipment. A deposit that maps to those numbers is easy to explain to a client and easy to defend if challenged.
A deposit that matches your real costs is easy to defend. One that doesn't is a refund waiting to happen.
New clients are a fair reason to ask for more upfront. There is no payment history, no relationship and no track record of them signing off on time. Plenty of creatives take a larger deposit from a first-time client and relax the terms once trust is established. That is a reasonable commercial judgement, provided the larger amount still sits within the costs and reserved time the job actually ties up.
Writing "non-refundable" on an invoice does not settle anything. Whether a deposit can be kept generally depends on what the contract says, why the client cancelled, how large the deposit is relative to the price, and what the supplier actually lost. A modest deposit backed by a clear contract stands on firm ground. A large one labelled non-refundable, with no costs behind it, may be treated as a prepayment of the price that has to come back, less any genuine loss.
Deposit terms are a contract matter, so having a lawyer or the Arts Law Centre of Australia draft them is the safer course.
The deposit is often treated as milestone zero. In many milestone arrangements, later payments are tied to stages the client can see and approve, depending on the project and circumstances, because approval is a natural moment for money to change hands.
For a design, illustration or video project, the stages usually look like this: brief accepted, concepts delivered, concepts approved, drafts or rough cut delivered, revisions complete, final files delivered. Not every stage needs its own invoice. Two or three payment points across a project of a few weeks are plenty. Longer projects (a book illustration job, an album production, a website build) earn more.
Here is a simplified illustration using round hypothetical numbers on a $5,000 project. Real figures depend on the job, the client and individual circumstances.
The deposit is 30% on signing, so $1,500. A second 30% payment of $1,500 falls due when concepts are approved. The final 40%, or $2,000, falls due on delivery of final files. The three payments total $5,000, and the creative has $3,000 in hand before the last stage of work begins.
Some milestone schedules are paired with terms about pausing work while an invoice is overdue and about how sign-off happens. These are contract matters, and a lawyer can advise on how they should be drafted. Milestones also help here. Each sign-off point is a structured chance to catch and fix issues before they grow, and a documented approval makes it much harder for a client to claim later that the whole job was unsatisfactory.
Final files should generally follow final payment. Releasing high-resolution images, master recordings or source files before the balance clears removes the strongest incentive a client has to pay.
A kill fee is the amount owed when a client cancels a project partway through, or rejects finished work, for reasons that have nothing to do with the creative's performance. It is different from a deposit. A deposit is paid upfront to secure the job; a kill fee is calculated at the point of cancellation based on how far the work got. Many contracts credit the deposit against the kill fee, which keeps the arithmetic clean.
Australian industry bodies treat kill fees as standard. The general principle is that a freelancer should be compensated when work is cancelled or finished artwork is rejected for reasons unrelated to the artist, that the amount should reflect the stage reached, and that cancellation fees should be defined in the contract. Some industry agreements negotiated with publishers for freelance writers include kill fees.
There is no universal Australian kill-fee percentage. Rate guides such as the Australian Society of Authors' recommended rates for freelance writing help set what the job is worth (Australian Society of Authors, 2024), but they do not create a right to a kill fee on their own. If it is not in the contract, it is a negotiation after the fact, and that is a weak position.
Continuing the same simplified $5,000 illustration, a staged kill fee with the deposit credited might look like this. The percentages are hypothetical. Real kill fees need to reflect the genuine work done and costs incurred at each stage.
| Stage reached when client cancels | Paid so far | Illustrative kill fee | Settlement |
|---|---|---|---|
| Brief accepted, research under way | $1,500 | $1,250 (25% of fee) | $250 refunded to client |
| Concepts delivered, not yet approved | $1,500 | $2,500 (50% of fee) | $1,000 owing to creative |
| Concepts approved, drafts delivered | $3,000 | $3,750 (75% of fee) | $750 owing to creative |
| Final files delivered | $3,000 | $5,000 (full fee) | $2,000 owing to creative |
Notice the first row. When the client pulls out early and the deposit exceeds the value of work done, the excess goes back. That is the genuine-loss principle in action, and building it into the schedule from the start shows the client the terms are fair.
A well-drafted kill-fee clause generally covers:
The usage point matters more than most creatives expect. A client who cancels and pays a kill fee for concepts generally should not walk away with the right to use those concepts. A lawyer or the Arts Law Centre of Australia can advise on rights and usage clauses.
Contract terms only protect cash flow if they hold up. Australian Consumer Law and the unfair contract terms rules put limits on what a supplier can charge when a client cancels, and they can apply to small business clients as well as consumers. As a general principle, charges that reflect genuine costs and work already done are easier to justify than charges with nothing behind them.
Whether a particular deposit, kill fee or cancellation clause is enforceable depends on the contract and the circumstances, so it is worth having a lawyer or the Arts Law Centre of Australia check your terms before you send them to clients. For a live dispute over a deposit or kill fee, the right call is a solicitor or the Arts Law Centre, not a blog post.
Plenty of creatives know all of this and still invoice everything at the end, because asking for a deposit feels pushy. It isn't. Every venue, photographer's studio and print shop in the country asks for money before they start. Clients who balk at a fair, clearly explained deposit are telling you something useful about how the rest of the job will go.
What helps is making the terms boring. Many creatives include the deposit, milestones and kill fee in the quote, the contract and the first invoice, using the same numbers every time. Some explain them once, in plain English, before the client signs, and automate the follow-up. Xero can send the deposit invoice the moment a quote is accepted, schedule milestone invoices and chase overdue ones with reminders, which removes the awkward personal email from the equation.
Many creatives also keep deposit money visible in their books. A deposit received is not yet money earned, and treating it as spare cash is how creatives end up short when the job goes ahead and costs land. How deposits are treated for income tax and GST depends on the arrangement and your circumstances, and a registered tax agent can explain how the rules apply to your situation.
A clean payment structure won't make creative income predictable. It can make the gaps narrower, the cancellations less painful and the conversation about money a lot shorter.
This article is general information only, reflects the rules at the time of writing and does not take your personal circumstances into account.
If your cash flow is playing out of time, we're happy to help you find the groove again. Give the Amplify 11 team a call on (02) 4715 1000 or drop a line to [email protected], and let's get your numbers back in tune.
Generally yes. Deposits are not limited to large projects, and a small holding deposit on a short job can reduce no-shows and late cancellations. The amount usually scales with the size of the job and the time reserved. For very small jobs, some creatives prefer full payment upfront instead, which keeps admin simple. The same genuine-loss principles generally apply if the client cancels.
A deposit or kill fee clause usually only protects the creative when the client cancels. If the creative pulls out, the client would generally expect a refund of money paid for work not delivered. A balanced contract addresses cancellation by either party, which also reduces the risk of the terms being viewed as one-sided. A lawyer or the Arts Law Centre can review the wording.
A well-drafted contract can define what happens if a client goes silent, for example treating the project as cancelled after a set period without feedback, which then triggers the kill fee for the stage reached. Without that clause, the position is less clear. Documenting each attempt to contact the client helps, and Arts Law or a solicitor can advise on a specific situation.
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