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50768745
Community Manager
Community Manager

Announcing new, simpler fees on Upwork

Today we introduced two key pricing changes: on May 3, 2023, we are retiring our sliding scale fee structure and introducing a 10% service fee for all freelancers, and on April 26, 2023, we are implementing a one-time contract initiation fee for clients of up to $4.95 per contract. Click here for the full announcement.

 

Please share your questions and feedback in the thread below.

1,883 REPLIES 1,883
sofia2008
Community Member

So, for a freelancer who already brought a $10,000 contract (for which Upwork got $1050 in service fees) you remove the 5% fee and will raise it to 10% at the end of 2023? Quite an incentive to keep «serious paying clients» on the platform.

Sophie, Denis and others,

We will be continuing the 5% service fee through the end of 2023 on contracts that are already eligible, in order to give freelancers like you time to adjust to this new fee structure and to adjust their own rates, work strategies, and contract selections accordingly.

 

In many cases, freelancers on Upwork will see simplified and reduced fees as a result of this change. 

 

The new fee structure will also simplify freelancer processes:

  • Freelancers won’t have to track tiers on contracts to determine how much they will earn each week
  • Freelancers won’t have to calculate fees for multiple tiers when determining pricing for a contract.
  • Calculating year-end revenue and expenses may be easier to do once all contracts have the same freelancer service fee percentage
~ Valeria
Upwork

None of that is helpful, but thanks for the corporate spiel. I will be figuring out how to move my 2+ year clients off platform before I lose my 5% fees with them as well. Doesn't make any sense to give up that much money after 2 years. And yes, for some of us it will be thousands of dollars in loss. Do not preach to me about adjusting my rates or my business model. We can all see Upwork is becoming a glorified temp agency. This move simply validates that. 

I'm with you here, it's thousands in loss for me too! I've been on this platform for 7 years, and this is how they reward loyalty. 

Sofia,

 

What about the freelancers that have earned more than you and this is a pay raise for them?

what about lower the rate for the first $500 to 10% but keep the rate for those of us with long term clients at 5%?

Kelly,

 

Upwork lost $89 million last year and needs to become profitable therefore there are only so many fee cuts possible.

So your company managed to lose 89mln DESPITE all the changes that you introduced throughout the last 4 years (paying for connects, auctions, etc.) and we have to pay for it?! 

 

Have you tried considering the idea that the reason why you keep losing money is that freelancers are moving to better marketplaces?

Michele,

 

I am an Expert freelancer on this site who has completed $900,000 with 350 jobs in the past five years.

 

Why do you FEEL that Upwork is losing money by freelancers leaving?

 

Did you know that there are 4,000,000 active freelancers to 800,000 active clients on this site per quarter. In my opinion, we need the majority of the freelancers to leave.

Yeah, "how do you do, fellow kids".

 

It's just a guess, but if there are different answers to how the company managed to lose money despite the extra costs that they added for us in the last years, I'll be happy to hear them.

Michele,

 

Even with these 10% fees Upwork is less than the 20% fees from the other major competitor.

 

I would much rather have 10% than 20% anyday.

 

Fees that are too low are not sustainable.

 

I have always Upskilled for the past 25 years as a freelancer and continue to increase my rates regardless of the platform.

We don't care about you or your experience, William. It seems like you have an illusion that you have the right to teach us, which is quite hilarious.

Your position is clear: "Stop whining, just swallow it. You can't do anything. I invested money into this company, so I only care about profits." That's an understandable position, but you are not contributing anything to the conversation.

Evgeniy,

 

I am sorry you FEEL that way.

 

I don't own Upwork, however IMHO believe this is the BEST freelancing site.

 

If Upwork doesn't become profitable, the company will cease to exist and we ALL lose.

 

Upwork's current gross margins are 16% and the company lost $89 million in 2022.

 

5% freelancer fees with 5% client fees equals 10% total fees. That is helping the company to lose too much money too fast.


William T C wrote:

Evgeniy,

 

I am sorry you FEEL that way.

 

I don't own Upwork, however IMHO believe this is the BEST freelancing site.

 

If Upwork doesn't become profitable, the company will cease to exist and we ALL lose.

 

Upwork's current gross margins are 16% and the company lost $89 million in 2022.

 

5% freelancer fees with 5% client fees equals 10% total fees. That is helping the company to lose too much money too fast.


Hey, wait, isn't it that you are an investor in Upwork and what you are interested in is that they win and win and win?
Because if so, I think your opinions will be quite biased ðŸ¤”

Maria,

 

Investors can long and short a company and use financial instruments called PUTS and CALLS.

 

Therefore, either financial position can easily be made in seconds.

 

IMHO Upwork is the best freelancing site and as a freelancer want it to prosper.

 

What is your opinion on that matter?


William T C wrote:

IMHO Upwork is the best freelancing site and as a freelancer want it to prosper.

 

What is your opinion on that matter?


It's nice that Upwork is the best freelancing website FOR YOU. Up until last summer, I would have said the same. But now that my invitations have all but disappeared and I'm getting no response to my proposals - no new clients at all for months now - I can't really make a case for this being the best website FOR ME. Other long-time freelancers who were previously successful feel the same. It's not that difficult to understand.

 

And no, this isn't a matter of upskilling or synergising or all of the other things that you've been saying over and over and over again. My services are in demand everywhere EXCEPT Upwork. This leads me to the conclusion that this website no longer provides a good ROI for me. Obviously, Upwork needs to become profitable and they're going to run their business as they see fit. I don't expect them to care about my specific situation, but you can't expect me to be happy about it, either. 

 

Why do you really think that Upwork is making the kinds of changes that they've implemented over the past year? Surely you don't buy the whole spin about the fee changes being made for "simplification" purposes? It seems to me that every recent change has been made in order to grab a bigger market share from the website-that-shall-go-nameless, but is known for its cheap prices rather than its high standards. IMO, Upwork reduced the service charge to 10% in order to siphon off freelancers from this competitor, along with bringing in project catalogs, doing away with testing, and doing everything in their power to encourage newbies to stay on the platform (despite saying that there are too many freelancers). And now this latest manoeuvre, doing away with the 5% incentive; while this barely affects me at all, I see it as further disturbing evidence that Upwork just doesn't see a future in catering to expert, higher-charging freelancers. And, if good freelancers take their services elsewhere, how long do you think that good clients will stick around?

 

You keep saying that greater expertise will save us from becoming obsolete, and I just don't think that this is the case (not here, anyway) - I think that Upwork is trying to go down-market, not up-market, and it's the cheaper freelancers with mid-level talent who will be in demand. Even if you just look at the images that Upwork is using in their online advertising these days, the underlying message seems to be, "Hey American clients, come get yourselves some cheap talent from developing countries." The change in approach may not have affected you personally - yet - but if I were you, I wouldn't be quite so complacent nor so dismissive of other people's concerns.

 

Edited to add: BTW, how do you feel about this announcement that Upwork is going to hide those big earnings that you're so proud of, and also hide the profile overview that you've worked on "synergising"? It's yet another change that's designed to benefit newbies at the expense of loyal, successful freelancers.

Christine,

 

Thanks for showing the new test announcement!

 

I am indifferent to the change because clients truly want the process streamlined, and I will just adapt my strategies as needed. But let's see how it affects the results.

 

The weak macroeconomy and generative AI are absolutely affecting freelancers in your job category and will continue to. Yes, your services are in demand, however not at that billing rate. Too many freelancers will do the same work for as little as $10 per hour. I am sure that you do exemplary work, however that can be a hard sell in the current business environment especially when employees are getting laid off with those skills in corporations.

 

Upwork produced a 2023 most in-demand list skills. It's not easy for everyone or maybe not for most, however that is what clients want. I have always been Upskilling for the past 25 years as a freelancer and don't see any way around doing so.

 

My clients are from 30 different countries with many of those from developing countries and they are more than happy to pay $200 per hour. Why? Because I have Expert in-demand skills and know how to sell.

 

Freelancers that can't or will not adapt to the business conditions probably were not destined to be freelancers in the first place.


William T C wrote:

Christine,

 

Thanks for showing the new test announcement!

 

I am indifferent to the change because clients truly want the process streamlined, and I will just adapt my strategies as needed. But let's see how it affects the results.


If you want to stick your head in the sand and not admit that Upwork is going in a different direction than one that will benefit you, that's your business. I've been freelancing for over 23 years and I know how to adapt to changing circumstances, and I've never put all of my eggs in one basket as you've done.

Christine,

 

I have been freelancing for 25 years and 4 of the sites used have produced 7 to 8 figures in sales for my services with my Upwork Profile of $900,000 being the smallest.

 

I understand that you FEEL bad about the changes and sorry to hear. As you stated, you will learn to adapt.


William T C wrote:

Christine,

 

I have been freelancing for 25 years and 4 of the sites used have produced 7 to 8 figures in sales for my services with my Upwork Profile of $900,000 being the smallest.

 

I understand that you FEEL bad about the changes and sorry to hear. As you stated, you will learn to adapt.


I've already adapted, thanks, and found other ways to market myself that are more beneficial. No need to feel sorry for me. But it's funny you're now saying that Upwork is the smallest of your sales funnels, when in previous posts you've said that you find it most convenient to direct all of your customers here. **Edited for Community Guidelines**

I've also stopped getting invitations and hear far fewer responses to applications.

 

What's  caused this, do you know? Is it changed they've made to the platform?  I'm top in my field and used to get every job I interviewed for, but it's become so slow recently.

 

I assume the new connects changes and these (that benefit new freelancers) would reduce quality for clients, so I'm confused...

I think that they've changed direction and we need to look elsewhere for jobs.

Boriana,

 

Please modify your Summary into four short paragraphs. It's too long and many clients will stop viewing the rest of the Profile. Consider changing the Earnings to Public from Private so clients can see the size of projects handled. 

 

Bigger Issue: You are in a job category that has been harder hit by the weak macroeconomy and generative AI especially since employees are being laid off with these types of skills.

 

View Upwork's 2023 list of in-demand Skills for more jobs. With a Master's in Computer Science, there are many in-demand jobs that clients need assistance.

100% agree. In the IT world we've already been pitting Silicon Valley costs of living against middle America costs of living with proposal rates spread over an unrealistic range wherein you know that 9 out of 10 times the potential client from LA is going to select talent from Birmingham over San Jose because of $$ and the story of experience and ongoing currency won't ever be part of their thought process. I was brought in twice last year on projects where lesser talent had been hired first, burned through a chunk of budget, and then I got to clean things up and get those projects on track.

 

It gets worse when you are competing with the global environment. Which means anything that isn't in U.S. only is a waste of time to start.

 

This new fee structure makes it easier for lesser talent, working on small jobs, and harder for expert talent working on large jobs.

[ Applause ] Thank you Christine for your words of wisdom.

I want to love Upwork and have in the past couple of years sang it's praises. After wading through all the piddly rubbish jobs for asking for the moon on peanuts I managed to find a few gems of clients that I love working with. I paid my dues and the membership and the connect to prove myself worthy and I now have my regular clients that I have appreciatively paid my commission on and stayed on the platform with them because, after all, I found them here. Even when clients have asked we leave to reduce fee cost. So, yes, I do want it to succeed, but don't penalize me for being loyal. Terms of a existing contract should not change. That is the point.


William T C wrote:

Maria,

 

Investors can long and short a company and use financial instruments called PUTS and CALLS.

 

Therefore, either financial position can easily be made in seconds.

 

IMHO Upwork is the best freelancing site and as a freelancer want it to prosper.

 

What is your opinion on that matter?


To a good understander, few words are enough.
I think I have already answered you. Not once but several times.

And actually, is this an answer to everything I asked?

A lot of people left Upwork when they raised the 10% to 20%, there was a lot of talk about it and Upwork didn't listen. My main customer which has 6 contracts with me at 5% for over 3 years now will simply disappear from upwork and be invoiced directly. There is no point to keep them on here. I would be OK if they change to 10% for all but keep the existing contracts to what they are for ever not for the next 9 months only.

Hi Florian,

I agree with you. For existing contracts removing the 5% to 10% will demotivate long-term freelancers on Upwork and they may move to other platforms. 

Huh? So 10% freelander fees with 10% client fees equals 20% total fees. What's you point. The world might be a better place without platforms like Upwork where people with dramatically different costs of living are competing with each other. On the IT side we're seeing ridiculously broad bid ranges on top of high proposal submissions (usually over 50) on top of exorbitant Boost bids. Upwork needs to stop gouging and focus on leveling the playing field.

Mark,

 

Client fees are 5% not 10% with the new total 15% not including misc fees.

Wanna know how Upwork becomes profitable? Stop spending so much money on advertising. Make the CEO's and higher ups take a paycut - because we all know they're millionaires at this point. Maybe charge CLIENTS for each job/project post?! Upwork seems to pander to the client, which is why 20 percent of the posts you see are either scams, never come to fruition, or eventually disappear without choosing a winner. That's why Upwork needs to charge to post a job. To weed out all the scammers and nonstarters. And... to add to your super important need to be profitable.

Why are we, the freelancers (the ones looking for work) paying for the right to simply apply for things, with no promise that we'll ever get hired? You urge us to apply for jobs all the time yet we are only allowed a certain amount of connects (aka upwork currency) which doesn't even let us apply to a dozen jobs. It's a rigged system and it has always been in the clients' favor. 

I say if you want to make some money, stop charging the little guys! Charge the clients so that you get better clients in general. Charge the clients so that you know they are trustworthy and are not going to scam us. Charge the clients because that will show us, the freelancers AKA the reason your company exists in the first place, that you might actually give a **bleep** about us. I don't know about everyone else on here but I live paycheck to paycheck. And I come on here to hopefully find work so I can get some bills paid. 90% of the time no one ever responds to my proposals, which makes me lose hope in myself and the process. And it doesn't make me want to spend money on more connects or get a premium membership. It hurts my pride and wastes my time. And that isn't just because people aren't choosing me to do the job, it's mostly because the jobs I applied for never actually happened, or the post was taken down. And that is why clients should have to pay or offer up some sort of collateral to put a job posting up. Even a measly dollar could make a huge difference. Because they are usually posting ONE job at a time, right? If they want an awesome freelancer and want people to give them their time and proposals then THEY should pay for that service. Especially if they have no intention of hiring anyone anyways. CHARGE THE CLIENTS TO POST!!! Case solved 🙂

Andrea,

 

Most of those items you listed have already been implemented.

rmeske
Community Member

Andrea and all freelancers,

 

No one wants to pay fees, or taxes, but we do because everything has a cost in a free market.

 

Below is purely an interpretation of what has gone happened based on my knowledge having been a business owner.  Remember, Upwork is not a non-profit, they are a for profit business and therefore exists to make money for their employees and stock holders.

 

Upwork, previously Elance & oDesk, came about to provide a service that was focused on the gig market versus hiring or temp work.  In a very simplistic view, to compete in this market and gain market share they came up with a pricing strategy to not charge upfront fees but instead collect a percentage of revenue. This approach gave small businesses a way to compete in a very competitive market for talent and just pay for what they needed versus having an employee.

 

As the platform gained popularity I can see how the busines costs increased from the need for technology to support the increased use to the employees need to run the business. 

 

So why the sudden change in pricing structure, that is fairly easy to see even without asking Upwork.  The pandemic happened and there was a surge in people discovering that working from home was possible and they enjoyed it.  More businesses realized that there were jobs they could outsource to freelancers.  Both of these led to a surge in both job posts and freelancers joining.  

 

Given what we know about Upwork financials now, the percentage they were collecting wasn't enough to support the growth they have gone through and most likely because of the number of jobs that never hire and with hourly paying being low.  So, they had to come up with a new pay structure that they felt would keep them profitable and able to continue offering this service to both businesses and freelancers.

 

As freelancers we may not agree with their choices in how the fees are charged and who pays them, but as long as their are those that are willing to pay them and it is making Upwork profitable the fees will remain.  I can say with confidence that Upwork is not going to change their fee structure unless it becomes unprofitable.

 

As individuals we do have free will and can choose to go other platforms for freelance work or we can decide to seek out fulltime employment and leave the freelance market.  Freelancing is not for everyone and has become more competitive and it will continue to become more competitive. To compete you will need to do what small business owners have to do, learn to compete by distinguishing yourself from others and continuing adapting in an ever changing marketplace. For some, that means broadening your reach to a wider market utilizing multiple avenues to reach potential clients, and for others that means specializing and finding a niche market where there is less qualified talent to compete against.

 

It all comes down to your ability to adapt to change.  Vent your frustrations, but once done, take a moment to examine your skills and what motivates you and then come up with a direction that you want to go and focus on getting there.  What I find is that many freelancers do not consider themselves a small business owner, but that is exactly what they are.  It is a different mindest and can be the difference of excelling or struggling to survive.  If you haven't, you may want to look for resources on starting a small business and go through the steps of creating a business plan.  There are a lot of free resources out there that can help.

 

 

 

 

 

So William, tell me you rather 10% over 5%, you know that most of us work hard to get to the 5% and this is how UpWork is paying back to us, having us go back to 10% and when some one new comes and gets a 10% directly. I think this is not fair, I will request the company to seek another method of payment since this is not fair, your tracking clock always has an issue with connection and makes me work more to get that time lost because even if I sent a report you never to nothing so paying you guys more for not even taking care of this issues, it`s not worth.

Mario,

 

I would rather have 0% fees, but of course that is not possible. Upwork loses money with 5% fees; it's not profitable.

 

If you experience issues with Upwork's tracking clock, I would report and send screenshots. Typically programmers need detailed information to have the opportunity to address issues.

You know quite a lot about company's policy and finances for a "freelancer".**Edited for Community Guidelines**


Michele G wrote:

Yeah, "how do you do, fellow kids".

 

It's just a guess, but if there are different answers to how the company managed to lose money despite the extra costs that they added for us in the last years, I'll be happy to hear them.


Upwork and its foundational/predecessor corporations have never been profitable. It commands enough market share and attracts enough revenue to sustain the investment that keeps it afloat (keeps the lights on, and pays at least one eight-figure salary). It got a bump from pandemic remote contracts that seemed to accelerate its long, slow, trajectory toward profitability. That bump did not produce lasting enough growth to continue the arc toward profit. Losses are not surprising.

 

The question is whether Upwork's current moves will improve revenue enough to keep investors interested—or will losses reach the point where investor confidence evaporates, and Upwork must sell its market share to the highest bidder, as Elance did when it got bought out by oDesk?

$900,000/350,  average contract is about $2500. If you want the benefits of a lower rate, try maintaining long term clients with high paying contracts? You are adamantly looking out for yourself at the expense of those of us who worked hard to get our fees to 5% and even if a rate increase would 'even us out'. I am strongly inclined to maintain the integrity of my business model, keep running my business how I've built it and decline to change my business model due to the greed and poor business decision making of a company. The solution is not to raise our fees. I don't even see how a person can support such a power move. They are disrespecting freelancers with the whole 'oh you won't have to calculate fees that are so complicated', give me a break! Every person that chooses to freelance is well versed to calculate fees! Stop the condescending comments. Wrong is wrong no matter how you put it 

Dannelly,

 

From a busines perspective, Upwork needed to standarize the fees to 10% to better manage the company and did.

 

As a freelancer, we need to Upskill, do outstanding work, and move toward in-demand jobs.

 

Upwork doesn't OWE any of the freelancers anything. We are not employees.

 

I have been freelancing for 25 years and can unequivocally state to be success for the longterm one must adapt to the business environment or consider whether they are better suited to become an employee.

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