Milestone Payments for Freelancers: How to Get Paid at Every Stage of a Project

Waiting until the end of a project to invoice is the single riskiest thing a freelancer can do. Milestone payments fix that — they keep cash flowing, limit your exposure, and give you leverage if things go sideways. Here's exactly how to structure them for any project.

Why You Should Never Wait Until the End to Get Paid

Picture this: you spend six weeks building a website for a new client. You pour in evenings and weekends. You turn down other work to hit the deadline. You deliver everything on time, send the invoice, and… silence. The client goes quiet. Two weeks pass. Then a month. You're now two and a half months deep with nothing to show for it but a Figma file and a growing sense of dread.

This isn't a hypothetical. It's the most common payment horror story in freelancing. And it's entirely avoidable.

When you invoice only at the end of a project, you're giving the client maximum leverage and yourself zero protection. You've already delivered the work. They have the files. Your only recourse is to chase, escalate, and eventually consider Small Claims Court — a process that takes months and costs you time you could be spending on paying work.

Milestone payments flip this dynamic. Instead of one payment at the end, you break the project into stages and get paid at each one. The client never owes you more than a fraction of the total fee at any point. You never work for weeks without compensation. And if the relationship goes bad at stage three, you've already been paid for stages one and two.

The cash flow argument

Beyond risk, there's a pure cash flow reality. If you're working on a project for 8–12 weeks and only invoicing at the end, you're funding the client's project with your own money. Your rent doesn't wait. Your software subscriptions don't pause. Your tax bill doesn't care that your client hasn't paid yet.

Milestone payments keep money moving in while the project is active. Instead of one £6,000 invoice after three months, you get three £2,000 payments spread across the project. That's the difference between checking your bank account with anxiety and checking it with confidence. For a deeper dive into managing irregular income, read our guide to freelancer cash flow management.

The psychology of client commitment

There's a subtler benefit most freelancers miss: clients who pay as they go are better clients. Each payment is a moment of active commitment. They're reviewing the work, approving a milestone, and making a conscious decision to continue. That engagement leads to better feedback, faster approvals, and fewer "actually, let's scrap everything and start over" moments in week seven.

A client who hasn't paid anything until the end is a client who's been passively watching. They've had no financial checkpoints that force them to engage with the work in progress. And passive clients are the ones most likely to surprise you with massive change requests at the eleventh hour — or ghost you entirely.

How to Break Any Project Into Payment Milestones

The key to milestone payments is tying each payment to a specific, verifiable deliverable. Not "when we're roughly halfway through" — that's subjective and invites disagreements. Instead: "when the first draft of all five pages is delivered." Clear. Measurable. Impossible to argue about.

The universal milestone framework

Regardless of your freelance discipline, most projects follow a natural rhythm that maps neatly to payment stages:

1. Deposit (project kick-off) — Paid before any work begins. This secures your availability and confirms the client's commitment. Think of it as stage zero.
2. Concept / first draft / initial deliverable — The first tangible output. For designers, this might be wireframes or mood boards. For writers, a first draft. For developers, a working prototype. The client sees real work and pays for it.
3. Mid-project review — The project is roughly half done. Revisions from the first milestone have been incorporated, and the work is taking shape. This is the "point of no return" payment — the client has confirmed the direction and is paying to continue.
4. Final delivery and sign-off — The completed work is delivered. The final payment is due on delivery (or within a short window, e.g. 7 days). Files are handed over once payment clears.

Not every project needs four stages. Smaller projects (£1,000–£3,000) often work fine with three: deposit, midpoint, and final. Very large projects (£10,000+) might benefit from five or six. The right number depends on the project length and complexity — but three milestones is the minimum for anything substantial.

Milestone examples by freelance type

What "milestones" look like in practice depends on what you do. Here's how to structure them for common freelance disciplines:

The Ideal Milestone Percentages

How much should each milestone be worth? The answer depends on how much work each stage requires and how much risk you're willing to carry. But the core principle is simple: front-load the payments. You should have received the majority of the project fee before you deliver the final work.

Why? Because the final deliverable is your leverage. Once you hand everything over, you've got no cards left to play. If the client's going to be difficult about payment, you want to discover that when they owe you 25% of the fee — not 100%.

Three-milestone structure (most common)

This is the workhorse structure. It's simple to explain, easy to administer, and works for the vast majority of freelance projects. By the time you deliver the final work, you've already received 70% of the fee. If the client ghosts at that point, you've lost 30% — painful, but survivable.

Four-milestone structure (for larger projects)

On a £12,000 project, this means you've received £9,600 before handing over final files. Your maximum exposure at any point is £2,400 — a manageable risk even if the worst happens.

High-risk client structure (new client, no track record)

For new clients — especially those you haven't been able to credit check or who don't have an established track record — front-load harder. A 50% deposit is standard and reasonable. It's not paranoia; it's good business. See our complete deposit policy guide for scripts on how to ask confidently.

How to Write Milestone Terms Into Your Contract

Milestone payments are only as strong as the contract that defines them. A verbal agreement — "we'll sort out payments as we go" — is worth nothing when a client decides they're not paying. You need clear, specific language that ties payments to deliverables, defines what happens when payments are late, and protects you if the project is cancelled mid-stream.

The milestone payment schedule clause

Notice two critical details: the deposit must be paid before work begins (non-negotiable), and final files are transferred after the final payment clears. That second point is your insurance policy.

The late payment and work-pause clause

This is the clause that gives milestone payments their teeth. Without it, a late milestone payment is just an awkward situation. With it, it's a contractual trigger that pauses the project until payment is received.

This clause does three things: it gives you the right to stop working (protecting your time), it shifts deadline responsibility to the client (protecting your reputation), and it references the UK Late Payment of Commercial Debts Act (protecting your legal rights). For a deeper guide to structuring all your payment terms, see our post on freelance payment terms and contract clauses.

The cancellation clause

What happens if the client cancels the project at milestone two? Without a cancellation clause, you'll end up in a messy negotiation about what you're owed. With one, it's already settled.

That last point is important: the client only owns what they've paid for. If they cancel at milestone two and haven't paid for milestone three, they don't get the milestone-three deliverables. This is standard practice and gives the client a strong incentive to either complete the project or pay a fair cancellation fee.

The approval mechanism

Milestone payments require milestone approvals. Without a defined approval process, a client can delay payment indefinitely by simply never "approving" the deliverable. Build a timeframe into the contract:

The "deemed approved" clause is essential. It prevents the classic stalling tactic: the client goes quiet for three weeks, then comes back with extensive feedback and claims the milestone was never approved. Five business days is generous. After that, silence equals approval, and the invoice is due.

Handling Milestone Disputes

Even with a solid contract, milestone disputes happen. A client might refuse to approve a milestone to delay payment. They might claim the deliverable "isn't what they expected." They might simply go quiet. Here's how to handle each scenario without losing your cool — or your money.

Scenario 1: Client won't approve a milestone (to delay payment)

This is the most common milestone dispute. The work is done, it matches the brief, but the client keeps finding reasons not to sign off. "It's not quite right." "I need to show it to my team." "Can we just tweak one more thing before I approve?"

What's really happening: they're either short on cash or testing whether they can delay payment. The solution is to enforce the approval timeframe in your contract.

This email is firm but not hostile. It references the contract, states the deadline, and makes clear that the project pauses if they don't act. Most clients respond within hours.

Scenario 2: Client claims the deliverable doesn't match the brief

Sometimes this is legitimate — you misunderstood something. More often, the brief was vague, the client's expectations shifted mid-project, or a new stakeholder has a different opinion.

Your response depends on whether the deliverable actually matches the documented scope:

• If it matches the brief: Reference the scope of work. "I've reviewed the brief and the deliverable covers everything we agreed. Happy to discuss specific concerns, but the milestone is complete as scoped."
• If it doesn't match (your mistake): Fix it. Fast. No charge. Then invoice the milestone once the corrected version is delivered. Taking responsibility builds trust.
• If the brief was vague and their expectations evolved: This is a scope creep issue. Treat the additional requests as a change order — quote for the extra work, get approval, and invoice it separately.

Scenario 3: Client goes silent after receiving a deliverable

You deliver. You hear nothing. Days pass. Then a week. The "deemed approved" clause in your contract handles the legal side — after 5 business days, the milestone is approved and payment is due. But you still need to communicate:

If silence continues after this, follow our complete client ghosting escalation playbook. The same principles apply: polite nudge → firm reminder → formal demand → Letter Before Action.

Scenario 4: Client wants to skip a milestone and "settle up at the end"

This is a red flag. A client who agreed to milestone payments at contract stage but now wants to bundle everything into a final payment is either having cash flow problems or testing your boundaries. Either way, the answer is no.

The nuclear option: withholding deliverables

If a client refuses to pay a milestone and you've exhausted polite options, you have one powerful card: you own the unpaid work. Under your contract, deliverables transfer on payment. If they haven't paid, you're under no obligation to hand over files, grant access, or continue working.

This isn't a tactic to use lightly. But when a client owes you thousands and is making no effort to pay, it's your right. Combine it with a formal demand referencing the Late Payment of Commercial Debts Act and calculate what they owe using our late payment interest calculator.

Frequently Asked Questions

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Written by the team at Landolio — tools and templates for UK freelancers who'd rather do great work than chase payments.

This guide provides general information and is not legal advice. For complex contractual disputes, consider consulting a solicitor.