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What would you recommend for a fair pricing on Upwork?

ali-ws
Active Member
Ali S Member Since: Jun 18, 2016
1 of 6

I'm interested to hear what other freelancers think is a fair cut that Upwork should be taking.

 

I definitley understand how other freelancers are upset with the new fees.

 

Although for me personally 10,20,30,40% is not an issue as long as I'm getting value from it. 

 

What would you propose as a "fair" deal? 

 

 

prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
2 of 6

Ali: I think you have a good perspective.

 

Some people say "20% is not fair."

 

What does that even mean?

 

I think you are right that it doesn't matter if it is 10% or 40%, as long as you are getting value.

 

Here is a question I think a lot of people haven't considered:

 

What if you earn $5000 this month working on Upwork while it keeps 20%?

 

And what if you earned only $3000, with the same amount of effort, working the same number of hours, while working on Platform X, which kept only 10%?

 

And during the same month, you worked a part-time job at The Shop near your house... Same number of hours, and you earned $2000.

 

Was not Upwork, then, your most lucrative source of income, despite the percentage it is taking in fees?

suznee
Community Guru
Suzanne N Member Since: Aug 15, 2012
3 of 6

@Preston H wrote:

 

 

Was not Upwork, then, your most lucrative source of income, despite the percentage it is taking in fees?


 Preston,

 

It all depends on how much at the end of the year Uncle Sam takes from the earnings you made at Upwork. Roughly 15% of your earnings goes for taxes and then Upwork is taking 20% of it. That is 35% of your income that is being dipped into. And then you have Social Security taxes to pay. 

 

The job at the shop may be more lucrative as you take home more and get money back at the end of the year.

 

 

prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
4 of 6

I think what is confusing is that the word "earnings" is used in different ways in different contexts.

 

If you had a contract for $100, and the fee is 50%, then you earned $50.

 

Your online profile page may show "$100" in "earnings", but you actually took home $50 in this simple hypothetical example.

 

What I am saying is that if you take home $50 as a result of a 5% fee or 20% free or 50% fee, for the same amount of work, the fee is irrelevant. The amount of money you earned was the same.

 

It has nothing to do with taxes. You are taxed based on your actual earnings, not your client-paid contract amount.

 

So if you earned $2000 at the shop, that is $3000 less than $5000 in earnings. You are not taxed at a different rate depending on where you work.

goldenseal
Community Leader
Joshua T Member Since: Apr 18, 2016
5 of 6

@Preston H wrote:

You are not taxed at a different rate depending on where you work.


 Unless, of course, you consider the self-employment tax, but hey...

mtngigi
Community Guru
Virginia F Member Since: Feb 15, 2016
6 of 6

Yes, that is what makes that 20% a bit hard to swallow - those self-employment taxes. But at least we can take the fee as a write-off at tax time.

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