The short answer
Split any project longer than a couple of weeks into three payments: a deposit to start, a milestone payment at an agreed halfway marker, and the balance on delivery. Name all three in the quote before you begin, tie each one to something the client can see finished, and you never carry more than a third of the project unpaid at any point.
It sounds simple at first, but the secret is how to do it well.
What are milestone payments?
Milestone payments break one big invoice into a few smaller ones, each tied to a checkpoint in the work. Instead of doing six weeks of work and hoping the final invoice clears, you get paid as the project moves through stages you and the client agreed on up front.
Freelancers reach for this the first time a project runs long enough that fronting all the work feels risky. A brand identity, a multi-page site, a video series, a months-long retainer build. Anything where "I'll invoice at the end" means weeks of your time exposed if the client stalls, disappears, or changes direction.
How do you split a project into milestones?
Tie each milestone to a deliverable the client can look at and recognize as done. Vague markers like "50% complete" invite arguments, because you and the client rarely measure "complete" the same way. Concrete markers don't.
For most freelance projects, three stages cover it:
- Deposit to book the work. Paid before you start. This confirms the client is committed and covers your first block of time.
- A middle payment at a visible checkpoint. The design direction is approved, the first draft is delivered, the framework is built. Pick the moment where a real chunk of the value exists and the client can see it.
- The balance on delivery. Paid when the finished work is handed over, before the final files, publish access, or source materials change hands.
Bigger projects can carry four or five stages on the same logic. The rule stays the same: every payment sits behind a checkpoint the client already agreed counts as reaching that stage.
What percentage should each milestone be?
A clean default is 30% to book, 40% at the milestone, 30% on delivery. It keeps a real deposit up front, moves the bulk of the money before you hand over the finished work, and leaves enough on the final payment that the client stays engaged to the end.
Adjust it to the risk. A new client with no track record might be 50/25/25, weighting the deposit so you are covered early. A long-standing client you trust might be 25/50/25. The principle holds either way: you should never be carrying so much unpaid work that a slow payment puts your month at risk.
How do you word milestone payments in a quote?
Put the whole schedule in the quote in plain language, before any work starts, so no invoice ever lands as a surprise. Three lines are enough:
- 30% deposit to book, due before work begins
- 40% on approval of the first draft
- 30% on final delivery, before files are transferred
Each line names a trigger the client can point to. When the trigger happens, the invoice goes out. There is nothing to negotiate at invoice time because the negotiation already happened when they signed the quote.
If you work under a contract, the same schedule goes in the payment terms section word for word. The quote and the contract should say the same thing.
What if a client pushes back on paying in stages?
Most clients accept staged payments without blinking, because it is normal in every trade that does project work. When someone does push back, it is usually the deposit they are wary of, and the answer is to frame it around their outcome.
Staged payments protect the client too. They are never paying for work they haven't seen. Each release is tied to something delivered, so their money tracks real progress instead of a promise. Said that way, a milestone schedule reads as a sign you run an organized business, and that reassures the careful clients rather than scaring them off.
If a client refuses any deposit at all and wants everything on completion, treat that as information. It is the exact arrangement that leaves you most exposed, and it is worth asking why a fair split is a dealbreaker before you commit weeks to it.
How milestone billing protects your cash flow
The quiet benefit is steadier money. One invoice at the end of a long project means one point of failure and one long stretch with nothing coming in. Three staged invoices mean cash arrives through the project, and a single slow payer can only ever hold up a third of the total instead of all of it.
The catch most freelancers hit is admin. Tracking which stage each project is at, remembering to send invoice two the day the draft is approved, and knowing at a glance which milestones are paid and which are still out. That is exactly the part worth making effortless.
In Loot you set the client up once and send each stage as its own invoice in a tap, and the dashboard shows which milestones are paid and which are outstanding across every project you have running. When the client pays, the money settles straight into your own account through Stripe Connect, so Loot never sits between you and your payment. You always know where a project stands, and you never chase a stage you forgot you sent.
This is general information for Canadian freelancers and no substitute for legal or accounting advice. Check your own contracts and tax situation with a professional.
Frequently asked questions
How many milestones should a freelance project have? Most projects work well with three: a deposit, a middle payment at a visible checkpoint, and the balance on delivery. Longer or higher-value projects can use four or five, each tied to a concrete deliverable.
What is a normal deposit percentage for freelancers? Thirty to fifty percent is common. Thirty percent is a fair default for an established client; weight it toward fifty for a new client with no track record so your early time is covered.
Should milestone payments go in the contract or the quote? Both, saying the same thing. The quote sets the client's expectation before they commit, and the contract makes the schedule enforceable. Each milestone should name the trigger that makes its invoice due.
What if a client will not pay a deposit? Ask why before committing. A client who refuses any up-front payment leaves you carrying the most risk. Staged payments protect them as much as you, so a flat refusal is worth understanding before you start weeks of work.
Do milestone payments change how I handle GST/HST? No. If you are registered for GST/HST, you charge it on each invoice at the rate for your client's province, the same as you would on a single invoice. Each staged invoice is a normal invoice for tax purposes.