Upwork Fees

[7ba0c500]

Is this information true on Upwork rates? 

They charge you 20% for just the first $500 earned.  Then they charge you 10% up to $10,000 earned.  Then 5% after that.  Pls reply asap.

[benjamin_blue]

It's been that way since i started here 3 years ago, and pretty sure it's the same.

[7ba0c500]

Pls confirm the following:

That will mean I will get $9 instead of $10 (agreed per hour amount) for the first 55 hours (only). 

Then I will get $10 until I work 1000 hours (this is 6.5 months). Then Upwork will no longer get a fee?

[wescowley]

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Marisa Y wrote:

Pls confirm the following:

That will mean I will get $9 instead of $10 (agreed per hour amount) for the first 55 hours (only). 

Then I will get $10 until I work 1000 hours (this is 6.5 months). Then Upwork will no longer get a fee?

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No. At $10 / hour, you'll get $8 / hour for the first 50 hours, $9 / hour for the next 950 hours, then $9.5 / hour after that. The fee never stops completely. That assumes all of this is for the same client.

[23015623]

So, Mr Wees, 

Those 500+ dollars has to be from the same client, and not in total? For decreasing the fee to 10 percent. 

Thanks,

Kristina

[m_terrazas]

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Kristina S wrote:

So, Mr Wees, 

Those 500+ dollars has to be from the same client, and not in total? For decreasing the fee to 10 percent. 

Thanks,

Kristina

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Yes, with the same client.

[jbmaverick]

Upwork used to take a much more reasonable 10%. Then, when they had a large stable of freelancers who'd pretty much become dependent on work through Upwork, they DOUBLED their fee - charging more now than a personal literary agent, who would go out and GET work for you, charges.

[gilbert-phyllis]

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Johnathan M wrote:

Upwork used to take a much more reasonable 10%. Then, when they had a large stable of freelancers who'd pretty much become dependent on work through Upwork, they DOUBLED their fee - charging more now than a personal literary agent, who would go out and GET work for you, charges.

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I only depend on UW for part of my living. That said, I get excellent return on the fees UW charges. The platform DOES, essentially, "go out and GET work for" me. There's no way I could find or be discovered by the clients I've connected with here, without spending far more in marketing than I spend in fees (average 11-12% of gross earnings across each year). And there's no upfront investment, I pay as I go. 

[jbmaverick]

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Phyllis G wrote:

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The platform DOES, essentially, "go out and GET work for" me. 

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Thanks for sharing your thoughts, Phyllis. I, respectfully, disagree. The platform gets you OPPORTUNITIES for work, but it doesn't actually procure any work for you. You still have to search through the opportunities and submit proposals, and you may or may not get any work. Whereas a personal literary agent does actually go out and find and secure work for you - and doesn't charge more than 10-15%.
The other aspect of Upwork fees that I see as being designed to help Upwork at my expense is their applying the sliding scale to your work for each individual client, rather than to your work as a whole - I don't see any logical reason for that other than Upwork wanting to get 20% of your income as long as they possibly can.  🙂

[gilbert-phyllis]

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Johnathan M wrote:

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Phyllis G wrote:

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The platform DOES, essentially, "go out and GET work for" me. 

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Thanks for sharing your thoughts, Phyllis. I, respectfully, disagree. The platform gets you OPPORTUNITIES for work, but it doesn't actually procure any work for you. You still have to search through the opportunities and submit proposals, and you may or may not get any work. Whereas a personal literary agent does actually go out and find and secure work for you - and doesn't charge more than 10-15%.
The other aspect of Upwork fees that I see as being designed to help Upwork at my expense is their applying the sliding scale to your work for each individual client, rather than to your work as a whole - I don't see any logical reason for that other than Upwork wanting to get 20% of your income as long as they possibly can.  🙂

---

You're right, UW provides me with opportunities, not contracts. It acts as an escrow agent and otherwise, stays out of my business (for the most part) which suits me. If a literary agent is what you want and need, someone to represent your business interests while you focus on creative work, then you are in the wrong place.

Of course UW's business model is "designed to help Upwork at my expense", that's the way fee-for-service businesses make money. Set your fees to account for UW's cut and if the ROI is not there for you, then find other ways to promote your business. UW doesn't suit everyone but there's nothing predatory about it and nobody is forcing you to use it. 

[jbmaverick]

Well, if you can offer me a reasonable reason for Upwork doing their 20-10-5% scale on each client you have - rather than just on your total billing - I'm open to hearing it.

But consider the following scenario:

- One freelancer, a writer of moderate talent, has managed to land a whopping ONE whole client - after about a year, they've billed that one client enough so that they're only getting clipped 5% by Upwork on their current and all future work (as they will likely continue working for the one client indefinitely)

- Another freelancer, a supremely talented graphic designer who primarily offers website design services, has garnered literally dozens of clients over the course of a year, and has delivered outstanding work for all of them - However, because the nature of their work is such that it tends to be a "one-off" thing (e.g., "create a website for me"), even though their TOTAL billing is more than $100,000, they're still having to cough up to Upwork 20% of every payment they receive - and they'll likely never see Upwork's cut of their earnings drop from the 20% level down to the 5% level, just because the nature of their freelance work doesn't lend itself to recurring billings to the same client

QUERY: Does that strike you as being even remotely fair? And I'll repeat my earlier question: What train of logical thought (if any) somehow justifies that disparity in pay percentages between freelancer #1 and freelancer #2?

[gilbert-phyllis]

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Johnathan M wrote:

Well, if you can offer me a reasonable reason for Upwork doing their 20-10-5% scale on each client you have - rather than just on your total billing - I'm open to hearing it.

But consider the following scenario:

- One freelancer, a writer of moderate talent, has managed to land a whopping ONE whole client - after about a year, they've billed that one client enough so that they're only getting clipped 5% by Upwork on their current and all future work (as they will likely continue working for the one client indefinitely)

- Another freelancer, a supremely talented graphic designer who primarily offers website design services, has garnered literally dozens of clients over the course of a year, and has delivered outstanding work for all of them - However, because the nature of their work is such that it tends to be a "one-off" thing (e.g., "create a website for me"), even though their TOTAL billing is more than $100,000, they're still having to cough up to Upwork 20% of every payment they receive - and they'll likely never see Upwork's cut of their earnings drop from the 20% level down to the 5% level, just because the nature of their freelance work doesn't lend itself to recurring billings to the same client

QUERY: Does that strike you as being even remotely fair? And I'll repeat my earlier question: What train of logical thought (if any) somehow justifies that disparity in pay percentages between freelancer #1 and freelancer #2?

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What one FL pays has nothing to do with and no relevance for what another FL pays. In any case, you've been offered "reasonable reasons." The bottom line is that UW's model is what it is. Either it works for you or it doesn't. I don't really understand it when FLs who don't like it and don't find it profitable, nevertheless remain invested enough to come here and complain about it. (You're not the first, believe me, nor will you be the last, I expect.)

[petra_r]

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Johnathan M wrote:

And I'll repeat my earlier question: What train of logical thought (if any) somehow justifies that disparity in pay percentages between freelancer #1 and freelancer #2?

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Very simple.

Upwork analyzed their returns and found that they had the least problems, least disputes, least need for support personel being imvolved, and therefore by far the least costs associated with long term relationships between freelancers and their clients. Freelancers and their clients who have been working together for ages and where a lot of money has changed hands are generally just getting on with it happily and need no help. No support. No Upwork money spending in them. Upwork rewards that. They pass on the savings they make by not having to deal with issues on tiny contracts that earn them next to nothing.

Every new client - frelancer relationship is a risk and creates the potential of money having to be spent or costly issues that require support to step in, disputes, chargebacks etc. Small contracts cost them more. Hence they charge (essentially) a premium of up to, but a maximum of,  $50 on such contracts.

At a fee of 10%, Upwork would only earn $10 on a contract with a value of $100. If even the slightest thing goes wrong, that measerly profit turns into a loss in the blink of an eye.

[jbmaverick]

Thanks for your thoughts, Petra, but I don't think they actually address the discrepancy and different treatment of some freelancers that I pointed out.
To reiterate, some freelancers, just because of the nature of the work they do, are very rarely going to ever be able to establish long-term relationships with clients - they're nearly always going to be getting work that is a "one-shot" thing - for example, someone who does wedding photography. They're always going to be getting hit with the 20% fee, without any chance of working it down to the 5% level, because they can't possibly be hired on an ongoing, long-term basis . Again, I just don't think that's fair to them, and that it would be much more fair if Upwork applied the sliding scale percentage to the TOTAL amount of billing someone does, rather than figuring it separately for every client.
Jack

[nb5347]

That and they went public.......... Wall St. ruins everything.

[byork44 · Accepted solution]

This is per client:

As a freelancer, you’re charged a sliding fee based on your lifetime billings with each non-Enterprise client. This includes all contracts you’ve ever had with that client. Service fees are the same whether the contracts are hourly or fixed-price.

• $0-$500: 20%
• $500.01-$10,000: 10%
• $10,000.01 or more: 5%

Example: On a $600 project with a new client, a freelancer’s service fee would be 20% on the first $500 and 10% on the remaining $100. Their earnings after fees would be $490.

You can check your progress towards payment milestones under Reports › Lifetime Billings by Client.

Note: If you worked with someone under two different companies, those are considered different relationships and your lifetime billings with each company will be counted separately. However, working with someone under two different teams within the same company is considered a single relationship and therefore combined in your lifetime billings.

[jbmaverick]

Yeah, the "each client" bit is particularly aggravating - You could have $10,000 in billings, but still be getting hacked for 20% on everything because you've billed multiple clients rather than just one or two.

[jbmaverick]

A fact worth noting is that while Upwork charges freelancers 20%, they only charge clients a measly 3%. THAT burned me up when I learned about it. How is that fair? Why isn't it, say, a 10% fee for freelancers and a 10% fee for clients?

And if there is going to be such a huge discrepancy between what Upwork charges freelancers and what they charge clients - well then, just looking at it from a purely practical angle - Who can probably more easily AFFORD to pay 20%? - a COMPANY hiring a freelancer...or the freelancer?

**Edited for Community Guidelines**

[petra_r]

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Johnathan M wrote:

A fact worth noting is that while Upwork charges freelancers 20%, they only charge clients a measly 3%. THAT burned me up when I learned about it. How is that fair? 

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Clients actually pay 100% of the fee anyway. You (if you have any sense) factor the fees into your rate and prices, and in reality every Cent that is paid to Upwork out of the payment for the work is paid by the client.

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Johnathan M wrote:

 Why isn't it, say, a 10% fee for freelancers and a 10% fee for clients?

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The freelancer would end up getting the same, but from far less clients. Lots of clients would go elsewhere.

At the end of the day, if the client has a budget of $100, that's what they'll pay. Including fees. So whether, on paper, the freelancer or the client pays the fees, the end result is exactly the same: The feelancer ends up with $80. The fee is paid (in reality) by the client. ALL the money (what Upwork takes and what the freelancer gets) comes out f the client's pocket.

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Johnathan M wrote:

**Edited for Community Guidelines**

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That is an incredibly inappropriate and offensive comparison.

[hglewis]

It simply amazes me the bellyaching after the fact.

You're a Business Owner providing freelance services to clients.

That's the cost of doing business. 

What surprises me the most is that Upwork's knowledge base is open for anyone to read and understand the rates long before they sign on. 

There is literally no room to say, "I didn't know," or worse, "It's unfair!"

[hglewis]

Thank You, Thank You, Thank You, Petra!

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Petra R wrote:

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Johnathan M wrote:

A fact worth noting is that while Upwork charges freelancers 20%, they only charge clients a measly 3%. THAT burned me up when I learned about it. How is that fair? 

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Clients actually pay 100% of the fee anyway. You (if you have any sense) factor the fees into your rate and prices, and in reality every Cent that is paid to Upwork out of the payment for the work is paid by the client.

Petra just handed every freelancer the BEST operational business advice you must understand when it comes to pricing one's services!

Read the highlighted section over and over, and repeat it to yourself over and over until it fully sinks in!

[prestonhunter]

Jonathan, I believe that you are sincere, that you aren't just trolling us. But it really seems like you don't understand how these numbers work. You are fixating on one factor, fees "charged" to freelancers, rather than looking at the totality.

You should consider Dan and Ben, who are twins and roommates, living in the same town. Both work on different freelance work platforms.

Ben's platform only charges a 1% fee.

Dan's platform charges a 40% fee.

Last month Ben earned a net take-home amount of $500.

But Dan earned a net take-home amount of $5000.

Yet they worked the same number of hours, doing the same type of work.

Jonathan: How do you explain this?

[jbmaverick]

Preston,
Let's see...they both worked the same number of hours, doing the same kind of work, but Dan somehow netted $5,000 after a 40% fee, while Ben only netted $500 after a 1% fee.

How to explain that? Hmm...it would appear that Ben does the same kind of work as Dan, but somehow only gets paid about $25 an hour (for example, assuming both worked 20 hours), while Dan manages to get paid around $400 an hour for the same kind of work....
Jeez, I don't know, Preston - that big a disparity for "the same kind of work", same number of hours...  **Edited for Community Guidelines**.   🙂

JB

[petra_r]

Jonathan, the trick is to specifically go after bigger contracts and foster long term relationships. I'm up to 77% long term clients now. all at 10% with one at 5% and a couple more about to hit the 5%.  

My niche (translation) isn't THAT dissimilar to yours. The big relationships are out there, You just have to find them and then hang on to them. 

It is no harder to win one bigger contract than 5 smaller ones. It actually takes less time, costs less and is less risky.  Every Dollar I earn from my long term clients comes at 0 aquisition cost.

If you could just stop whining (which you have been doing since 2017) about the fee and concentrate on the opportunties and make a plan how to exploit those opportunities, you'd be a hell of a lot happier and you and Upwork would get on so much better.

You want to try it.

[jr-translation]

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Petra R wrote:

Jonathan, the trick is to specifically go after bigger contracts and foster long term relationships. I'm up to 77% long term clients now. all at 10% with one at 5% and a couple more about to hit the 5%.  

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Finally something I beat you in.

[petra_r]

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Jennifer R wrote:

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Petra R wrote:

Jonathan, the trick is to specifically go after bigger contracts and foster long term relationships. I'm up to 77% long term clients now. all at 10% with one at 5% and a couple more about to hit the 5%.  

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Finally something I beat you in.

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I shall improve haha.

It sort of illustrates my point though, doesn't it.

If we can do it, Johnathan can should be able to do it as well?

There is no point moaning that the fee is so high on small contracts and then ony going after small contracts...

[m_terrazas]

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Jennifer R wrote:

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Petra R wrote:

Jonathan, the trick is to specifically go after bigger contracts and foster long term relationships. I'm up to 77% long term clients now. all at 10% with one at 5% and a couple more about to hit the 5%.  

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Finally something I beat you in.

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If we're going to show off, I beat you both.
But..., I do not earn the same as you two 

[a_lipsey]

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Johnathan M wrote:

Preston,
Let's see...they both worked the same number of hours, doing the same kind of work, but Dan somehow netted $5,000 after a 40% fee, while Ben only netted $500 after a 1% fee.

How to explain that? Hmm...it would appear that Ben does the same kind of work as Dan, but somehow only gets paid about $25 an hour (for example, assuming both worked 20 hours), while Dan manages to get paid around $400 an hour for the same kind of work....
Jeez, I don't know, Preston - that big a disparity for "the same kind of work", same number of hours...  **Edited for Community Guidelines**.   🙂

JB

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How to explain that: differences in pricing models, business models, and clientele. If the nature of your business is less long term, then it seems like you should configure your business model to price accordingly for higher client acquisition fees. The nature of my work is so long term, that I don't really consider Upwork fees at all in my pricing. But if you are having new clients every week, then you need to increase your rates to account for what your client acquisition costs are. 

[jbmaverick]

Preston,

And no, I'm not trying to "troll" anyone - I'm just raising issues, asking questions, voicing my not-so-humble opinion. That's all.

I must admit though, that I'm a bit surprised by the vehemence with which some people essentially assert,  **Edited for Community Guidelines**, Upwork certainly SHOULD take 20% of my billings, and I will steadfastly fight for them to be able to do so each and every week!"   🙂

JB

[petra_r]

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Johnathan M wrote:

Upwork certainly SHOULD take 20% 

I WANT Upwork to take their fees because the fees ensure that Upwork is still there next week so I can make money on it...... As Upwork has never made a single Dollar profit to date, I'd rather they don't go bust any time soon.

[jbmaverick]

Petra,
Amazing that Upwork can manage to not be making a profit when - assuming an average 10% cut of the $2.5 billion in billings they had for 2020 - they generated about $250 million in revenues (NOT even counting all the float interest they earned sitting on freelancers' pay for 10 days - and that's a pretty penny over the course of a year). They could have paid every single one of their approximately 500 employees $100,000 a year, and still had a minimum of about $200 million left to pay the light bill, buy some really nice computers, pay for the office furniture, etc. (Not to mention the nearly $200 million they raised from their IPO) ...And they didn't manage to have a dime left at the end of the year? - Jeez, they must be gambling at the same casinos I do.  🙂
(Actually, it's probably that they're getting ripped off on their cable and internet package.)

JB

[NikolaS]

Hi All,

A few posts have been edited from this thread for Community Guidelines. We encourage our Community members to be professional and respectful to one another when posting here.

Please, be mindful of the Community Guidelines.

[gilbert-phyllis]

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Johnathan M wrote:

A fact worth noting is that while Upwork charges freelancers 20%, they only charge clients a measly 3%. THAT burned me up when I learned about it. How is that fair? Why isn't it, say, a 10% fee for freelancers and a 10% fee for clients?

And if there is going to be such a huge discrepancy between what Upwork charges freelancers and what they charge clients - well then, just looking at it from a purely practical angle - Who can probably more easily AFFORD to pay 20%? - a COMPANY hiring a freelancer...or the freelancer?

**Edited for Community Guidelines**

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The 3% charged to clients is a credit card transaction fee, I'm sure UW makes nothing on that.

The 20-10-5% taken from project payments covers everything else -- operational costs and the millions of dollars UW invests in marketing that attracts clients to the platform. For FLs it is essentially a pay-as-you-go biz dev program that rewards those who manage to align it with their own business models.

UW hasn't turned a profit yet but is managing to stay afloat and I, for one, am grateful. Even accounting for the fees, work I do through UW is more profitable because finding/being found by the clients here costs much less than pursuing them in the wild. When UW stops making money, then I stop making money and then it becomes a lot more difficult to pay for anything -- utilities, dog food, broadband, software licenses, car insurance, gin, taxes.

You want "fairness", start a non-profit. Some of us are busy earning a living here.

[wescowley]

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Phyllis G wrote:

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The 3% charged to clients is a credit card transaction fee, I'm sure UW makes nothing on that.

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My guess is they're at most breaking even on that, and I wouldn't be surprised if they're losing a bit. When I collect payments for off-platform clients, the CC fee is 2.9%+$0.30 for US clients and 3.9%+$0.30 for international. UW might be getting a volume discount, but I doubt it's much.

[jbmaverick]

Respectfully, I think you missed my point, which was why is the WHOLE (or at least the great bulk of the whole) burden of fees put on the freelancers, who likely have considerably less financial resources than the clients do. Isn't Upwork providing a service for clients just as much as they are for freelancers?? - So why should the cost of providing services only be assessed on one side of the equation?

[tlbp]

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Johnathan M wrote:

Respectfully, I think you missed my point, which was why is the WHOLE (or at least the great bulk of the whole) burden of fees put on the freelancers, who likely have considerably less financial resources than the clients do. Isn't Upwork providing a service for clients just as much as they are for freelancers?? - So why should the cost of providing services only be assessed on one side of the equation?

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I can't imagine someone with your area of expertise doesn't already know the answer to that question. 

 If it makes you feel better, think of it as Upwork charging you a $50 processing fee per new client contract which they are kind enough to discount if you fail to earn a minimum of $500 from that relationship. 

[petra_r]

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Johnathan M wrote:

Respectfully, I think you missed my point,

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I didn't miss a thing. I answered your question directly.

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Johnathan M wrote:

why is the WHOLE (or at least the great bulk of the whole) burden of fees put on the freelancers

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Please go back to my other post where it was explained in detail that, actually, the client pays 100% of the fee anyway. Freelancers pay the fee on paper only, as an advertising gimmick. Every last Penny of that fee is paid by the client. If you haven't factored the fee into your price / rate, you made a grave error.

Ultimately, on a $100 payment the freelancer gets $80 whether the client pays $100% of the fee or freelancer does. It's taken out of the payment at source. So it's gone - The freelancer ends up with 80% of what was paid either way. And all of it is paid by the client anyway.

It really can't be that hard to understand.

[jbmaverick]

Petra,

Okay, I'll grant your point that the client does pay the fee - although I think you're perhaps hanging it on a bit of a technicality. I'm still the one only receiving 80% of what I'm billing - and I'm also the one who's doing without my payment while Upwork enjoys collecting interest on it for the week and a half that it sits in their bank account before they dispatch it to me.  🙂

But, anyway - valid point - granted.
JB

[hglewis]

Hello Johnathan,

Here's how to combat the 20% issue on a one-time project.

The Client wants to pay $100. 

Upwork is going to take out 20%.

I have to wait 10 days for the delivery of monies.

My proposal will be $150. 

Why?

I'm not going to get $20 from the $100, and I have to wait for payment.

In the end, I get the $100 and an extra $20 for my time.

Win/Win/Win

[jbmaverick]

Woodrow,

Well, your suggestion there assumes that the client just gleefully agrees to pay $150 instead of $100...that ain't always the way it goes...sometimes the client's response to your attempt to overcome the 20% is just to hire the guy who'll do it for $50.

JB