Announcing new, simpler fees on Upwork

[StanG]

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.

[deimargd]

If a client stays after 10k it's because of the freelancer not Upwork. The freelancer pays $1050 to get to that point, builds a long term relationship, and keeps the client in the platform. I already find the 5% excessive, specially when you are also charging the client another 5%. Now, 10%? Makes no sense.

[decodistny]

Let's break down the first sentence of the press release - it's a doozy:

"We are excited to announce..."  We need to make more money.

"... our new simplified freelancer fee structure..."  simplified, but worse for our most trusted and high-value talent .

"... an industry-low rate..."  which we're increasing from 5% to 10%.

"... designed to offer you more ability to price your services competitively..."  i.e. higher.

"... and lower the fee on all new talent/client relationships..."  and increase the fee for long-term relationships .

[kfarnell]

Quite.

And this thread is filled with people who could have written a better version of the press release over a nice cup of tea if someone had asked nicely. Offering the elephant in the corner of the room a wave from the start would have drastically reduced some of the bad feeling. It really shouldn't need saying, but all it takes is remembering that there are people involved - not just numbers.

[6bfcdaf8]

corporate doublespeak at its finest

[data_divas]

The major problem I have with Upwork charging 10% instead of 5% on contracts over $10,000 is as a Top-Rated Plus freelancer who consistantly has 80-100% repeat long term clients is that I no longer feel recognized, appreciated or valued by Upwork for my hard work and accomplishments here.

[deborah-ponzio]

I have the feeling that one of the objectives of such change to the fee structure is to encourage freelancers to onboard more new clients (at 10% instead of 20%) instead of just sitting on our long-term, over the $10,000 threshold clients. Of course I'm not happy about it, they could have just removed the initial 20%. The doubling of the 5% fee just encourages taking long-term clients off the platform after the 2 -years mark. 

I am in favour instead of the one-time contract initiation fee for clients of up to $4.95 per contract. This will discourage many lowballers with $5 projects who attempt to recruit (and exploit) hundreds of freelancers but do not generate sound revenue for anyone (except themselves). 

[dushyant_14]

Agreed, but honestly, onboarding new clients is not the burden of the freelancers. It is of the platform which is now being passed on. We can onboard new clients if we have the freedom to operate, not extra fees for clients and too many rules to follow. 

Not only will clients stop using Upwork, the freelancers who were trying to hang on will also go away.

[deborah-ponzio]

With "onboarding new clients" I mean adding new clients as freelancers, working with more clients on Upwork. NOT doing the onboarding of new clients on behalf of Upwork. I hope it's clearer now. 😉

[dave_milne5]

Count me among those not happy we're being told that Upwork is now taking an extra 5% of our contracts where Upwork is nothing more than a payment facilitator. Existing contracts, with existing clients should be grandfathered indefinitely, as we're definitely not getting anything more for that 5%.

[dkoszarek1]

I agree. I have been in a contract with a client and been at 5% for years now. What Upwork is doing is very predatory. I will be closing my Upwork account at the end of 2023 if not sooner. To go from 5% to a 10% fee is ridiculous. Everyone in current contracts at the 5% rate should be grandfathered in at that rate.

[elisa_b]

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Stan G wrote:

Please share your questions and feedback in the thread below.

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Since my colleagues already explained their valid reasons in detail, I do not need to reiterate why Upwork is stabbing in the back their best freelancers with long-term contracts!

Looking forward to bringing outside of the platform all the clients I am allowed to, so neither they nor I will be paying fees anymore - win-win!

Yet another nail in the coffin of what once was a great platform!

[dushyant_14]

You first forced us to establish long-term contracts with clients to get to a lower fee structure. When more people did power through, now you want to put everyone at 10%?? Pick a lane and stick to it. 

Clients will see an extra charge for hiring someone. Even before that, clients did not want to use Upwork. Now, we get to explain why there is an extra charge in working with us.  Bravo!!

[4721bb94]

Hey!

I have a question in regards to the new fee structure.

By changing the fee structure, Upwork has effectively changed the terms under which I signed contracts with my clients, right? So, will Upwork allow freelancers and clients who have signed contracts during this time to move outside the platform before the 2 year mark? Without having to pay a ridicilous transfer fee? 

If not, I feel like this is a very predatory move from Upwork. I was never planning on leaving the platform. I was fine with first paying 20%, then 10% and then eventually 5%. And a big part of why I chose Upwork was the fact that it was rewarding long-term projects. Now all of that will change and if I want to move outside of Upwork with my long-term clients I have to pay 13,5%? Or stay for another year and pay 10% fees?

I don't know. I feel like the fair thing to do here is to let people who have signed contracts before this change move outside of the platform for free.

Thanks in advance!

[celgins]

By changing the fee structure, Upwork has effectively changed the terms under which I signed contracts with my clients, right?

If you're referring to the overall freelancer/client contract, freelancers and clients are free to negotiate any contract terms (i.e., scope, price) they choose.

So, will Upwork allow freelancers and clients who have signed contracts during this time to move outside the platform before the 2 year mark? Without having to pay a ridicilous transfer fee?

I highly doubt it. I think the 13.5% conversion fee is ridiculous too, but existing contracts are subjected to it. Since I currently have no long-term contracts on Upwork, I actually did not know about the conversion fee until Jonathan L and Melanie H pointed it out in this discussion.

[4721bb94]

Of course I can negotiate the specifics of my contracts with my clients. But when I open a contract with a client on Upwork, it's not just a two-party contract, but a three-party contract. So I don't just accept the offer me and my client agree upon, I also accept Upwork’s terms. And those terms didn't just change, they changed significantly. 

Being stuck in a contract for two years when the fees have changed from 5% to 10% seems pretty predatory to me. 

[celgins]

But when I open a contract with a client on Upwork, it's not just a two-party contract, but a three-party contract. So I don't just accept the offer me and my client agree upon, I also accept Upwork’s terms.

Yes, and we are all bound by those service fees. Before you even opened a contract with a client, you accepted Upwork's TOS, which means you accepted the possibilty of fee increases, whether those increases are minor or significant:

Upwork reserves the right to change the fees of the memberships, features, services, and options offered on the Site, or institute new fees at any time, in each case upon reasonable notice posted in advance on the Site for existing Users.

Some may agree that the 5% increase to 10% is predatory, but others wouldn't go that far. From a legal standpoint, I don't think Upwork's actions would be labeled "predatory" in a court of law.

With only 9 months left in 2023, those at the 5% tier will have to make decisions before those fees jump to 10% in 2024--whether their contracts are at the 2-year mark or not.

If you haven't already, you may want to check out the dialogue in the Feedback Forum regarding the accouncement. A lot of folks are anticipating the impending pain and how they might approach it.

[d26d5d29]

Is there freelancer/client contracts on Upwork? What happens if you don't inform Upwork of a private contract agreement? How would they know? What if the clients company folds in that time? What if the freelancer takes some other in person full time employment?

[marc_compte]

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Marija G wrote:

Hey!

I have a question in regards to the new fee structure.

By changing the fee structure, Upwork has effectively changed the terms under which I signed contracts with my clients, right? So, will Upwork allow freelancers and clients who have signed contracts during this time to move outside the platform before the 2 year mark? Without having to pay a ridicilous transfer fee? 

---

No, the fee you pay has nothing to do with how you charge the client. You issue an invoice to the client, then Upwork issues an invoice to you with the fee. The first one does not change, unless you change the terms with your client. Of course, you may have planned the rate based on the tire system and you may want to negotiate a new rate with your client, but until then it is not the client's concern how big your fee is. I'm afraid that is all you can do, besides taking in the extra cost.

Upwork does keep the 5% fee for those relationships already in this tier, but only until end of 2023, then it will charge 10%. They won't let you leave Upwork before the 2 year without paying the transfer fee.

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Marija G wrote:

If not, I feel like this is a very predatory move from Upwork. I was never planning on leaving the platform. I was fine with first paying 20%, then 10% and then eventually 5%. And a big part of why I chose Upwork was the fact that it was rewarding long-term projects. Now all of that will change and if I want to move outside of Upwork with my long-term clients I have to pay 13,5%? Or stay for another year and pay 10% fees?

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More or less, yes. According to the documentation the transfer fee is calculated based on a full-time job ($8.424 at a rate of $30/h). So if you have two clients and you want to move them both out I suspect they charge twice the amount.

Also, if you pay the fee you have to be certain the client will keep you busy for at least a year or more, otherwise you will have paid a lot more than you would charging through Upwork.

Most often your best option is to stay (or let the client pay the transfer fee).

[m_terrazas]

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Stan G wrote:

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.

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I have read the whole thread, I had not heard of this "new great news".
I agree with all the complaints that have been made, and I disagree with those suspicious endorsements that I have read.
I must say that it benefits me specifically, since I will hardly reach 10,000 and many jobs will be below 500, but it seems totally unfair to me that those who have passed the barrier after keeping their clients here have to pay more.
Those freelancers are the ones that really give you credibility in the market. But now, go saying goodbye, you will see how many take their customers. I would do the same.
I'm not going to comment on the added charge to customers because I don't know where to start.

On the other hand, is this like throwing the stone and hiding the hand?
You release the release and I only see responses from Upwork to direct questions.
Can't you jump into the conversation and really explain that "vision" you've had?
Maybe we're all stupid and can't see.

[youssefbahaa]

It seems logical to ask, Should we expect the 2-Year Mark to be prolonged or canceled soon to serve this new announcement?
Also, Why charge the client each time for re-hiring the freelancer on a new contract? What is the idea behind that?

Guys this is not good for any party, especially in the long run.

I hope you re-think the decisions you make and see how it affects the Market (Freelancers & Clients) Not only the Platform benefits.

[williamtcooper]

Community,

Upwork as a company has to be profitable if we as freelancers want to continue to use this site for the longterm.

Freelancers and clients - we are Upwork - the paid staff on Upwork are the custodians of the site.

Upwork management is doing the best they know how to do with their limited resources. Upwork LOST $89 million in 2022 which can't continue forever.

Upwork's fees of 10% for freelancer, 5% for clients and $4.95 per contract compares against the other main site's 20% freelancer, 5.5% clients and $2 per contract. I understand everyone's concerns within the various Community threads depending on how various modifications directly affect them.

Let's face it Upwork has the VERY BEST platform for both freelancers and clients. PERIOD!

Standard USA Labor Law typically doesn't allow a freelancer to be the main labor for more than 9 months directly for a company or they are considered an employee. Unless your client is ready during weak macroeconomic conditions to add you as an employee good luck on leaving at the two year mark. Clients will consider employment costs, legal matters, management flexiblity, and many more issues before bringing a "big" freelancer off the site in two years. Clients will have to determine are you a freelancer, contractor or an employee.

As a group of freelancers, let's give SOLUTIONS to the staff that will help them as a company become profitable.

As an AI Marketing Economist Expert with 350 Jobs and $900,000 in Upwork sales, I am extremely in tune with how all of these "other" sites work. This is the BEST - PERIOD.

Upwork thanks for doing your best!

[d9fc6d8d]

Weird that everyone else thinks Upwork is not doing its best. Weird that Upwork's "best" has run the platform to the ground regarding credibility with both clients and freelancers in less than a year. Weird that you think the amount of money you have earned on Upwork has any relevance to this discussion. Maybe you're just that enlightened, William. Kudos to you.

PS: I will give the staff solutions once they pay me to do so. It's bad enough that I have to flag 50 scam job posts a day from my job feed.

[25005175]

I wonder how much of the expenses (and thus losses) are the renting, upkeep and moderation of the Community website, as well as the seminars and talent huddles.

Not advocating for their termination. Just curious. Seems to me that these programs likely contribute the least revenue.

[researchediting]

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Jonathan L wrote:

I wonder how much of the expenses (and thus losses) are the renting, upkeep and moderation of the Community website, as well as the seminars and talent huddles.

Not advocating for their termination. Just curious. Seems to me that these programs likely contribute the least revenue.

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Community fora, like the other activities you mention, contribute zero direct revenue. They are an expense, typically out of the marketing budget, and regulated for maximum corporate benefit under that department's purview.

edited to add: Upwork recently invested in a number of new Community staff positions, and perhaps infrastructure, focused on reshaping the forum to better serve their needs. So apparently they are committed to it as a necessary and valuable part of their service.

[kochubei_valeria]

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Douglas Michael M wrote:

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Jonathan L wrote:

I wonder how much of the expenses (and thus losses) are the renting, upkeep and moderation of the Community website, as well as the seminars and talent huddles.

Not advocating for their termination. Just curious. Seems to me that these programs likely contribute the least revenue.

---

Community fora, like the other activities you mention, contribute zero direct revenue. They are an expense, typically out of the marketing budget, and regulated for maximum corporate benefit under that department's purview.

edited to add: Upwork recently invested in a number of new Community staff positions, and perhaps infrastructure, focused on reshaping the forum to better serve their needs. So apparently they are committed to it as a necessary and valuable part of their service.

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Michael and Jonathan, 

I appreciate your viewpoint, and you may be right about how communities work at other companies. However, I want to share some insight into how our community works.
The Upwork Community team is part of the Product and Experience organization; we have never been part of a Marketing organization. You're right; we have been expanding the team! We want to continue building new community programs and maintaining current ones as they are a valuable part of our company operations and directly impact helping freelancers earn. For instance, our metrics from last year show new freelancers on Upwork who use Community and Academy tend to start earning sooner and more than those who do not. 

Our goal is to inform and help community members and elevate your voices. Which is why we carefully review all feedback, opinions, and comments in this thread to share with our greater teams daily.