Common structures
Thirds
One third to begin, one third at midpoint, one third on completion. Simple and widely understood.
50/50
Half up front, half on delivery. Common on shorter projects.
Deliverable-based
Payment attached to each named deliverable. Best alignment between work done and money received, and the most work to define.
What makes a milestone actually trigger
A milestone is only useful if it's objectively verifiable. "Payment on completion of design phase" invites disagreement about whether the phase is complete.
"Payment on delivery of three homepage concepts" doesn't. The more mechanical the trigger, the less negotiable the payment becomes after the fact.
Tying milestones to acceptance
Watch for: Milestones payable on client approval rather than delivery. If approval has no deadline, payment has no deadline — and the milestone structure provides no protection at all.
Better: Payment due on delivery, with a stated review window after which the deliverable is deemed accepted.
The part most guides skip: the stop-work clauseMilestone payments limit exposure only if you're contractually permitted to stop when one isn't paid. Without a stop-work clause, missing a milestone payment is a breach you can complain about while still being obliged to continue delivering. One sentence — "work will be suspended if any invoice remains unpaid beyond X days, without penalty" — is what converts a payment schedule from a schedule into actual protection.
Questions to ask before you sign
- How is the fee split across milestones?
- What specific event triggers each payment?
- Is payment due on delivery or on client approval?
- If on approval, is there a deadline for reviewing?
- Can I suspend work if a milestone goes unpaid?
- What are the payment terms on each milestone invoice?
Sources
- U.S. Small Business Administration — contracting and payment guidance
This is general information, not legal advice. Docly helps you find and understand what a document actually says. It does not tell you whether a clause is enforceable where you live, and it is not a substitute for a lawyer. For a decision with real money attached, get advice from an attorney licensed in your state.
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