Getting paid is the whole point of freelancing — but payment term clauses are where many freelancers encounter the worst surprises. A contract that looks standard can hide 90-day payment terms, contested approval processes, client-controlled milestones, and deductions that effectively reduce your rate significantly. Understanding exactly when and how you get paid before you start work is one of the most valuable things you can do.
What is a Payment Terms?
Payment terms in a freelance contract specify: when payment is due (e.g., 14 days after invoice); what triggers the right to invoice (delivery, approval, or a milestone date); how disputes about payment or quality are handled; whether a deposit is required; and what happens if payment is late. In the UK, freelancers have statutory rights under the Late Payment of Commercial Debts (Interest) Act 1998, but contractual terms can vary these rights significantly.
Red flags to watch for
If you can only invoice once the client "approves" the work, and there's no deadline by which they must approve, they can delay approval indefinitely. This is one of the most common ways clients delay payment.
Under UK law, unless expressly agreed, business-to-business payment should be made within 30 days. Terms longer than 60 days are only valid if they are "not grossly unfair." 90-day terms are very rarely justified for freelance work.
Working for months without payment is a serious financial risk. A contract for substantial work with no upfront payment and final payment on completion leaves you exposed to non-payment for all your work.
Broadly worded dispute clauses that allow the client to withhold all payment during any disagreement — including disagreements about unrelated matters — are a red flag.
Clauses allowing the client to reduce the agreed fee based on their assessment of the value delivered are one-sided and should be negotiated out.
Your legal rights
Under the Late Payment of Commercial Debts (Interest) Act 1998, if your client is a business and they pay late, you are entitled to: statutory interest at 8% above the Bank of England base rate; compensation of 40-100 pounds depending on the debt amount; and reasonable recovery costs. These rights cannot be contracted away unless the contract provides a "substantial contractual remedy" for late payment.
Questions to ask before you sign
- 1When exactly does my right to invoice arise — delivery, approval, or a fixed date?
- 2What are the payment terms (days to pay), and is there a late payment remedy?
- 3Is there an upfront deposit, and what percentage of the total fee does it represent?
- 4Can the client withhold payment during a dispute, and how is "dispute" defined?
- 5What process governs the acceptance or rejection of work, and what is the timeline?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.