Paying a freelancer for costs other than their labor

[21578cb1]

How do I pay the freelancer in China for costs, they may incur, outside of their labor.  Such as purchasing an item and then shipping that item?

[petra_r]

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@Kalid H wrote:

How do I pay the freelancer in China for costs, they may incur, outside of their labor.  Such as purchasing an item and then shipping that item?

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 As a bonus, with the "expense reimbursement" attached, but you have to include more because of the Upwork fee. (20% up to the first $ 500 you paid them, then 10%, then 5% from $ 10.000 onwards.

Alternatively you can buy the item yourself and pay for the shipping yourself, that saves you money.

[21578cb1]

Petra,  

Thanks for the quick response.  I'm confused though.  You said:  Upwork fee. (20% up to the first $ 500 you paid them, then 10%, then 5% from $ 10.000 onwards.

Can you go over each fee in a little more detail please?  Or better yet give me an example?  Let's say the freelancer orders 100USD in products for me.  Then she ships it to me in the US and the cost is 50USD.  So I owe her 150USD above what I need to pay her for her time.  How does the 20% and the 10% and the 5% get calculated? 

[petra_r]

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@Kalid H wrote:

Petra,  

Thanks for the quick response.  I'm confused though.  You said:  Upwork fee. (20% up to the first $ 500 you paid them, then 10%, then 5% from $ 10.000 onwards.

Can you go over each fee in a little more detail please?  Or better yet give me an example?  Let's say the freelancer orders 100USD in products for me.  Then she ships it to me in the US and the cost is 50USD.  So I owe her 150USD above what I need to pay her for her time.  How does the 20% and the 10% and the 5% get calculated? 

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 Freelancers pay Upwork a fee for everything they earn from their clients. This fee has three tiers.

On the first $ 500 a freelancer earns from any one client, Upwork deducts 20%

On everything between $ 501 and $ 10.000 from any one client, Upwork deducts 10%

On everything over $ 10.000 from any one client Upwork deducts 5%

So the fee on the $ 150 depend on how much you have paid your freelancer so far. If it is less than $ 500 you have to factor in an extra 20%

If you have already paid her more than $ 500, the fee is 10% and so on.

So if you owe her $ 150 for samples and shipping, you actually have to pay her an expense bonus of

$ 187.50 if she's earned less than $ 500 from you (so after the 20% she gets $ 150)

$ 166.66 if you haave paid her more than $ 500 so far. (so after the 10% she gets $ 150)

It might be easier and cheaper to simply buy the item(s) and the shipping yourself.

Do NOT attempt to send her the money directly, she could lose her Upwork account if you do, and with that her income. Not worth it.

[21578cb1]

OK>  I think I've got it.  One point of clarification though.  

$187.50 =  $150 in cost of goods and shipping plus $37.50 in fees would be 25% of $150 not 20%

Did I miss something here?  Is there and additional 5% fee charged somewhere?   Since I am new to Upwork I am just trying to figure this all out.  Thanks.  Kalid

[petra_r]

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@Kalid H wrote:

OK>  I think I've got it.  One point of clarification though.  

$187.50 =  $150 in cost of goods and shipping plus $37.50 in fees would be 25% of $150 not 20%

Did I miss something here?  Is there and additional 5% fee charged somewhere?   Since I am new to Upwork I am just trying to figure this all out.  Thanks.  Kalid

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 The freelancer is charged 20% / 10% / 5% of what you pay.

So when you pay me $ 100 I get $ 80 (at 20%) because Upwork takes the 20% from what you pay, not from what I get after the fee.

[m_roganovic]

You could also use LastPass to share your credit card information with your freelancers. That is what all of my clients have done in the past - I'd use their card to buy stuff for them, and ship stuff for them. That is how you avoid paying the additional fees, and your freelancer doesn't have to get reimbursed later. 

[petra_r]

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@Marina R wrote:

You could also use LastPass to share your credit card information with your freelancers. That is what all of my clients have done in the past - I'd use their card to buy stuff for them, and ship stuff for them. That is how you avoid paying the additional fees, and your freelancer doesn't have to get reimbursed later. 

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 Visions of freelancer having a fun time on Amazon with client's credit card...

I would strongly advise against any clients essentially giving a freelancer control over their credit card.

If abused, the client could not even claim unauthorised use and do a chargeback, having (for all intents and purposes) handed over the card.