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Is it right to charge Upwork commission fee for actual cost?

a_satoshi
Active Member
Satoshi A Member Since: Oct 8, 2016
1 of 8

Hi all,

I'd like to speak up about this theme: "Is it right to charge Upwork commission fee for actual cost?"

Upwork is a great platform. It keeps creating connections between freelancers and clients all over the world. For freelancers, whoever can create some value have chance to sell it. For clients side, they can hire capable people with competitive price. In that sense, Upwork deserves to take commission fee (although the recent policy change may not be acceptable for many people).

However, I think Upwork should improve its system. I'd like to point out about actual cost.
Actual cost is what you pay to perform your job.
For example, if you do business trip from US to Europe, you want to buy a plane ticket. Let's assume, it's $800. If you pay it on your own, you can ususally get it back from your employer or client. That's not your income. So your Government never impose tax on it. If the actual cost is taxed, you should feel unfair.

However, with current Upwork system, it impose commission on your actual cost.
In my case, I got a request form a client in Europe. As I'm Japanese and live in Japan, he wants me to write a letter in Japanese and send it to him. In this case, I estimate the cost for my client as below.

1. Handwriting in Japanese
2. Related activities (going to printing shop and post office)
3. Letter set fee

4. Postal fee

 

In this case, #1 and #2 are value that I will create. #3 and #4 are cost that I need to perform this job.

However, if I ask the actual cost as it is to my client, I will lose money. What Upwork suggests is that I ask my client to pay some extra for #3 and #4.
Thus, if Upwork anyway charges commision for actual cost, either freelancers or clients lose money.  That's not fair.

In my opinion, Upwork should charge only for created value not actual cost. Therfore, it should improve system so that freelaners can seperate actual cost from their reward. 




 










versailles
Community Guru
Rene K Member Since: Jul 10, 2014
2 of 8

Upwork has no way to be sure if a payment done by a client is meant to cover expenses or to pay for a service. Thus they apply the fee on each transaction.

 

It would be extremely convenient otherwise to avoid the fees by pretending that you have that many expenses to cover.

 

I don't see any reasonable and cost-efficient way for Upwork to do what you suggest.

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"Where darkness shines like dazzling light"   —William Ashbless
a_satoshi
Active Member
Satoshi A Member Since: Oct 8, 2016
3 of 8

Yes, I thikn so if I put myself in the position of Upwork. But I'm speaking up this from a freelancer's position. I'd like to motivate Upwork to improve its system.

Also, it's possible for Upwork to develop a system in which people cannot make a fake cost statement.

tlsanders
Community Guru
Tiffany S Member Since: Jan 15, 2016
4 of 8

@Satoshi A wrote:



Also, it's possible for Upwork to develop a system in which people cannot make a fake cost statement.


 I don't believe that it is, unless the nature of expenses that may be reimbursed through the platform is seriously limited. Even if it were possible, it would be labor-intensive for Upwork to verify invoices, which is not something we want, since it would increase their cost of doing business and thus our fees.

tlsanders
Community Guru
Tiffany S Member Since: Jan 15, 2016
5 of 8

No, it's not. But, there's no viable solution that wouldn't open the door to a lot of circumvention of fees, so that's what we're stuck with if we choose to incur expenses and bill Upwork clients. There are a number of ways to avoid this. For example, my offline clients often establish accounts for the purchase of stock photography, research and measurement tools, press release platforms, etc. with their own credit cards and then provide me access to order directly through the platform using the client's credit card.

a_satoshi
Active Member
Satoshi A Member Since: Oct 8, 2016
6 of 8

Thanks for nice remark. I agree that there are many ways to avoid the cost. But all the transctions are supposed to be done through Upwork according to Upwork policy. If we strictly stick to Upwork policy. If so, this actual cost issue should be addressed not by freelancers' effort but Upwork's.

tlsanders
Community Guru
Tiffany S Member Since: Jan 15, 2016
7 of 8

@Satoshi A wrote:

Thanks for nice remark. I agree that there are many ways to avoid the cost. But all the transctions are supposed to be done through Upwork according to Upwork policy. If we strictly stick to Upwork policy. If so, this actual cost issue should be addressed not by freelancers' effort but Upwork's.


Having a client purchase photos, tools, etc. directly and provide you with access does not violate Upwork's terms of service, as those are not transactions between you and the client and you are not receiving any money. 

gerrys
Community Guru
Gerry S Member Since: Nov 23, 2014
8 of 8

Send it C.O.D.

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