As a freelancer, you can (if you wish) add a cancellation fee to your booking in case the client cancels the contract at short notice before the start date.

You should only use this for long assignments booked well in advance and be reasonable in how you calculate your cancellation fee.

If you have never applied a cancellation fee before and don't know what it should be, you can use a simple formula to get a ballpark figure based on your rate and the time taken to find a new assignment.

Cancellation fee = Daily rate x Estimated time taken to find a new assignment

For example if your day rate is £250, and it will take you approximately 3 days to time a new role, you could set your cancellation fee to £750.

It’s important to remember that a cancellation fee isn’t a right, you do have to get the client to agree to it. So it’s really important to be reasonable in what you ask for.

What’s reasonable would depend on the circumstances. So for example, the £750 cancellation fee from that example above would look very reasonable to a client on a booking for a 4 week assignment, but if it was a booking for just a couple of days, then that looks more unreasonable to a client.

As a rule of thumb, a cancellation fee should never be higher than day rate x number of days in the notice period for the assignment.

The cancellation fee will only apply if the assignment is cancelled – it’s quite possible that a client may ask you to move your dates a little, and that’s up to you and the client to agree. Moving an assignment is not a cancellation.

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