Guide · Billing models
Deposit vs retainer vs milestone billing
All three get money before the final invoice. They are not interchangeable: a deposit is part of the price, a retainer buys access, and a milestone is a payment tied to delivery.
Three ways to split a payment
| Model | What it pays for | Typical invoice |
|---|---|---|
| Deposit | Part of the total price, paid up front | Show the full total, then amount paid and balance |
| Retainer | Ongoing access or capacity, usually monthly | Invoice the period in advance; bill overage separately |
| Milestone | A defined deliverable or phase | Invoice the milestone amount when it is accepted |
Deposit
A deposit reduces your risk and confirms the client is serious. It is not a separate fee: it is part of the project price. On the final invoice, show the full project total, then the deposit already paid, then the balance due. Do not reduce the line items to the remaining amount — that hides the real price.
Retainer
A retainer buys access to your time or capacity, often for a month. Decide whether it is billed in advance or in arrears, what happens to unused hours, and whether overage is allowed. Bill the retainer period clearly: “Monthly retainer — March 2026.” If you draw down hours, show the used and remaining balance.
Milestones
Milestone billing ties payments to phases: 30% at kickoff, 40% at design approval, 30% at launch. It works when the deliverables are clear and the client can approve them. Put the milestone name on the invoice and reference the acceptance email or sign-off.
How to show each on the invoice
- Deposit: full total, “Amount paid” line, “Balance due” line.
- Retainer: the period covered, the amount, and any overage as a separate line.
- Milestone: the milestone name and the percentage or amount agreed.
- Credit or refund: a credit note, not an edit to the invoice.
Do not double-bill
The most common error is charging the deposit twice: once as a line item and again by leaving it out of the total. Keep one source of truth — the project total — and show payments against it. If a client pays a deposit and then cancels, the contract should say whether it is refundable, transferable or forfeited.
What to put in the contract
- Whether the deposit is refundable, transferable or forfeited if the project is cancelled.
- What happens to unused retainer hours at the end of the month.
- Which milestones require written approval before the next invoice is issued.
- Whether late payment pauses work, and whether a late fee applies.
Which one should you use?
Use a deposit for a defined project, a retainer for ongoing work, and milestones for a larger project with clear phases. You can combine them — a deposit plus milestone payments is common — but say so in the quote so the client understands the schedule before they commit.
The deposits and retainers guide covers the invoice wording, and the freelance sample shows an amount-paid line. Start the pricing conversation with a blank quote template.
Related
Deposits and retainers
Show the deposit, deduct it and avoid double-billing.
Payment terms and late payment
Net 30, due dates and a reminder sequence that works.
Invoice numbering
Sequences that hold up when a client or auditor checks.