Freelance Invoice Payment Terms: Net 15, Net 30 and More
Payment terms are the line on your invoice that says when you expect to be paid. Pick them well and you get paid faster; leave them out and the client picks for you. This page explains the common options, shows what an early-payment discount really costs, and gives wording you can paste into an invoice or contract. If you want a working invoice with a due date that calculates itself, start from our free invoice template.
The common terms
PayPal's business guide to invoice payment terms defines them like this. Source: PayPal, invoice payment terms.
| Term | What it means |
|---|---|
| Upon receipt | Payment is due as soon as the customer receives the invoice |
| Net 7, 10, 15, 30, 60, 90 | Payment expected within that many calendar days of the invoice date |
| 2/10 Net 30 | Due in 30 days, with a 2% early-payment discount if paid within 10 days (1/10 and 3/10 work the same way with 1% and 3%) |
| EOM | Due at the end of the calendar month; less common, usually for recurring monthly invoices |
| 15 MFI | Due by the 15th of the month following the invoice date |
| Payment in advance / 50% upfront | Full payment, or a 50% deposit, before work begins |
For most freelancers the choice is between "due on receipt," Net 15 and Net 30, plus a deposit on larger projects.
What an early-payment discount really costs
Say you send a $2,000 invoice with terms of 2/10 Net 30. If the client pays within 10 days, they take 2% off: $40, so you receive $1,960 about 20 days earlier than the full-term date. Our own arithmetic: that is a 2% price for 20 days of faster cash, which works out to roughly 37% a year (0.02 ÷ 0.98 × 365 ÷ 20). That is expensive money if you do not need the cash, and cheap if you are covering a bill. Offer a discount only when speed matters more than the margin.
How to choose
PayPal's guide suggests picking terms that fit your cash flow, your industry norms and your customer relationships, and says Net 30 is common but not required. It lists industry norms such as 30-day terms for manufacturers, 60 or 90 days in construction and 90 or 180 days for government agencies, and up to 75 days for professional services, and advises against terms that differ much from what your industry expects. A practical approach for a solo freelancer:
- New or small clients: Net 15 or due on receipt, and a deposit before starting.
- Larger companies: expect Net 30 or longer. If you accept it, price the delay into your rate.
- Big projects: split the invoices into a deposit, milestone payments and a final one so you are never owed the whole fee.
- Cash is tight: upon receipt, advance payment, or 50% upfront. PayPal cites construction as a case where 50% upfront covers material costs.
Agree terms before the work
The PayPal guide recommends agreeing terms in advance and stating them clearly on the invoice. The contract checklist covers where to put them in your agreement. Terms on the invoice that nobody saw before the work started are much harder to enforce.
A due date example
PayPal's own example reads: "Payment due within 14 days of the invoice date, or July 14." Always show the actual date as well as the number of days, so nobody has to count.
Grace periods and late fees
The same guide suggests allowing three to seven days after the due date before a penalty applies, and gives an example term of a 2% late fee each month after 30 days. If your agreement allows a late fee, write the rate into the terms; see how much a late fee should be and the late fee calculator for the numbers, and check what your state allows.
Wording you can copy
Payment is due within 15 days of the invoice date. A late fee of [rate] per month applies to unpaid balances after [number] days past the due date. A deposit of [percent] is due before work begins.
Replace the brackets with your numbers, and have a professional review the wording if the amounts are large.
FAQ
Is Net 30 standard for freelancers?
It is common, but PayPal's guide says it is not required. Many freelancers use Net 15 or due on receipt for small clients and accept Net 30 only from larger ones.
Should I ask for a deposit?
On larger projects, usually yes. A deposit (PayPal's example is 50% upfront) covers your early costs and shows the client is committed.
What does "Net 30" count from?
From the invoice date, according to PayPal's guide. Make the invoice date and the due date explicit on the document.
General business guidance, not legal or tax advice. Payment terms and late-fee rules vary by place; check what applies to you.