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ยป Forums ยป Support ยป Re: Announcing new, simpler fees on Upwork
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StanG
Community Manager
Community Manager

Announcing new, simpler fees on Upwork

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.

2,023 REPLIES 2,023
25005175
Community Member

Your point?

nkkkki
Community Member

Platform pokes me to find other platform. I was motivated to find a long term project and I got two of them, working a 64 hours per week just to keep both long term contracts now you decide to increase fee by 5 %. Thanks for nothing. 

I would prefer to stick with old COMPLEX FEES and keep my projects at 5% fee level. And also remove this auctioned bids and deflate connects values as it was previously. 

xlbin
Community Member

The new fee structure will also simplify freelancer processes:

  • Freelancers wonโ€™t have to track tiers on contracts to determine how much they will earn each week
  • Freelancers wonโ€™t have to calculate fees for multiple tiers when determining pricing for a contract.
  • Calculating year-end revenue and expenses may be easier to do once all contracts have the same freelancer service fee percentage

It probably will help new freelancers and freelancers with a lot of small contracts. It's not bad. But why the most loyal of us should pay for this? It hurts badly the most loyal of us and our long term contracts. We can do basic arithmetic and we are able to calcualte our average real Upwork fee (fee that includes all our payments to Upwork, including monthly subscription and connections cost). It was less than 10% and it's going to be greater than 10%.

Increasing fee for the existing long-term contracts (which already far beyond 2 years opt-out period) will just push freelancers to take the contracts out of Upwork. It would be relatively fair to keep 5% fee for all existing freelancer-client long-term relationships. Otherwise the above list of 'benefits' is a bad marketing attempt to sell us a calcualtor with "+", "-", "x", "/" and "=" buttons for a price of a high-end laptop (and higher, taking into account that it's not one-time payment).

iana_vasileva
Community Member

This is a real bad move Upwork! How do you motivate experienced top freelancers which bring you more money to stay on the platform and not leave and take your best paying clients with them too? This is only stimulating gigs and newbies. You are going to ruin your own business with this move. Your actions should be aimed to retain top talent and clients which pay more and not the opposite.

cyber_sec007
Community Member

Ok, I'm sure I will be unpopular with this, but here are my 2 cents.  

 

Upwork enabled me to work with clients all over the world and make a good income. However, I'm not on social media, I don't do any marketing activity, I'm not selling or posting or having a possible client pipeline, and I don't have a website. As a result, I have used only upwork to make 900K+ over 3.5 years. 

 

However, In my niche and the service I'm offering, engagements are usually finished in 4-6 months, as the implementation projects are completed. So in other services, I'm sure this is different. Hence this is only my opinion and approach. However, I do have some long-term clients where the engagement is continuous after a successful project,  and they are long-term clients because we have a good relationship. So they will understand if I explain that things need to be changed a bit.

 

I could have taken them off upwork as it is over the two years. Still, then I have to pay 2,9% for stripe to receive international payments, I'll have to hire an accountant to make sure all is nice and tidy, etc.. so let's say the cost and administration would be about 6%...so the gain is only 4% (compared to the option staying on Upwork at 10%).  

 

Also, if I left Upwork completely, I would need to set up my sales channels, figure out where and how I can reach my potential clients, and how can I convince them to hire me, so that would be a hassle, cost, and stress.

vs.

Clients come to upwork looking for a specific skillset with the intention of hiring someone to solve their problem, and where my proof of service level and professionalism is showcased on my profile. 

 

So while it is a change that takes away money, it is not something that is unmanageable for me.  At this moment, the pros of being on Upwork and working via Upwork outweigh the cons, again for me.

 

If an FL does not need new clients and has only a couple of long-term clients, then, of course, this can hurt a lot, but if a client does not understand/accept that an FL needs to raise the fee due to inflation/upwork cost, in my opinion, that is not a good client. If it happened to me, I would not want to work with that client anyway...

 

what will you say when in a year they will raise up to 15%? will it be critical for you?
For all the time they changed tactics that only led to an increase, so it should be considered that this is not the last percentage in the selection of the commission.

I'll look at the situation if that happens. As I said, at this moment, it is manageable for me. 

In 2022 I did not really like the fact that upwork was my only pipeline so, I tried out the other platforms as well, without any success; the quality of the clients and projects are unmatched. The fee on 5r is 20% with 14 days payout...freelancer.com does not have any quality jobs, again in my niche....maybe in other niches those can work but for me nothing out there. 

 

So at the moment it is Upwork for me...

It will be "take it or leave it". But my guess is lots of us will just take it. Did you check the amount of projects on other freelancing sites recently?

Why would you need a stripe account when you are selling consulting services? You are working for businesses, they don't want to pay with a credit card anyway they would just do a wire transfer to you just like any other b2b consulting company, costs a flat fee of 30$ just like wire transfer fee from upwork. 

We don't have to leave the platform entirely, but we will certainly take our long-term clients off platform. Why in the world would we stay? I can do my own billing; it was just such a good deal at 5% to let Upwork handle it that I let Upwork handle it.

 

Clearly they have done the math and think the loss of every 5% contract will be enough to cover the addition of a bunch of 10% contracts, but I wonder if they factored in time... thinking that we old timers wouldn't take the clients off the platform immediately. Seems like the best way to illustrate the possible loss for them is to start removing those contracts ASAP. But I can promise you that once I go to the trouble of doing that, I will not be bringing those clients back, even if they reenact the 5% fee.

adinka
Community Member

This is beyond insulting, not just because of the propaganda-like explanation of their motives but because of the effect it does to long-term and loyal freelancers on the platform.

 

I've been a member when it was still Odesk. I did a bunch of small gig jobs (where a decrease from 20% to 10% is definitely favorable) and eventually made a move to full-time freelance. Upwork is my bread and butter.

 

The current situtation of 5% fees was already more than 5% fees. Let's be honest.

The way the billing system is set up is that you get your end of the pay minus your fees, but you pay your state taxes for the larger, pre-fee sum, so you paid 5% (or however much you had to pay) off of a larger sum than you actually made.

Add to that VAT that I pay because Upwork bills me with an EU fiscal number, even though all of my clients are not based in the EU) and we add to that a lot.

 

I enjoy UpWork. I think that as a system, it works and I say that given the fact that in recent years it's been painful to look for work with all the scammers and just people who try to take advantage of qualified people and offer offensively low pay for overqualified people. 

 

Regardless, I invited other qualified freelancerers on to the platform, and I also invited clients to it. I have always did my best to help the community, participated in surveys and flagged and reported things to not stay passive when bad things are happening.

 

With everything mentioned, transitioning to full-time freelance and moving to long-term clients meant that those 5% fees were the only thing that was worth staying for. 

It now gets to the point where it just shows that the feedbacks and surveys we took the time to answer in details were not even read!

Or just chosen to be ignored altogether.

Taking away existing 5% fee means that you are taking a dump on people who helped support and push the platform forward in comparison with its competitors.

Increasing my existing contracts fees in 5% is MORE than 5% due to the way your billing system is structured, It adds up to THOUSANDS of dollars annually and that is very significant to a freelancer who is already struggling for every project they can get.

 

Asking us to talk to our clients and raise our rate to combat this is the most offensive thing you can suggest. We structured our existing rates in a way that would work for us, not you. And trust me when I say that asking for increased rates so that I can compensate for YOUR increased rates is not gonna get the results you expect.

 

Overall I am super offended and will defintely be looking to move my business elsewhere if this sticks.

This is unacceptable. 

kristopherlynch
Community Member

From long-term insentives, to this? Upwork had been praised for its focus on long-term client partnerships, how in anyway is this change honoring it? Getting more freelancers to join because (its easier and less initial grind) bloats the pool and deters anything good built up over the years. And the perks you say will be worth it? Clearly not. 

hkingsland
Community Member

I find this one of the most appalling decisions Upwork has taken.

While I agree that there are benefits to levelling the fee structure, particularly for those freelancers who only work on short-term, low-priced projects, not honouring the 5% fee on the contracts that are already eligible is just so so so bad. So Upwork are just okay with saying, "Sorry loyal freelancers, you'll be earning less money from Jan 2024 โ€“ deal with it how you will." Gosh, what a kick in the teeth. What do they expect to happen now? Many of those contracts will be eligible to leave the platform, and despite what some seem to be saying, that's really not as much of a hassle for some freelancers as it sounds. I have many clients outside of Upwork whom I communicate with and invoice by alternative means. I have no problem with taking another off Upwork when the time comes. Yes, otherwise, I'll have to raise my rate to balance it out. I'll consider that too. But not every freelancer is able to do that; every contract and working relationship is unique. Either way, because of this, we're all going to have to have an unnecessary conversation with our clients and cause us both a lot of faff.

Thanks Upwork. You have completely ruined my opinion of this platform.


2df4ac33
Community Member

There should be a dislike button here

jervin_marco
Community Member

**edited for Community Guidelines** I'm out and I'm taking my client with me.

cc830c97
Community Member

time to find a full-time job outside of Upwork and use Upwork for small freelance jobs only

you want to collect an extra 5k a year from my full-time contract? what a joke

gonato
Community Member

Leave all 5% fee contracts alone. How is your new pricing change would benefit our pockets when we are already at a 5% fee?

Upwork capitalism at its finest. ๐Ÿ˜’

goldsaj
Community Member

So what's my incentive to keep a client happy and coming back for more work with both me and Upwork?

Alex,

 

Because you want to get paid?

ladymsdiva
Community Member

Dear Upwork,

Given the news that the 5% fee will be raised to 10%, I am hereby informing you that you have until the end of 2023 to reverse that decision. I refuse to pay thousands of extra dollars without any added value.

Thanks, and have a nice day.
Cassandra : )
 

mohamadawada
Community Member

This is neither beneficial to the freelancers nor to the clients. Freelancers were incentivized to maintain long-term clients because the fees would go lower over time. Yeah, you're honoring the rate till the end of this year, but it's a very dishonest practice.

 

And for clients, this effectively means Upwork is no longer a viable platform for minor one-off jobs. Charging $4.95 on top of the 10% fees you charge freelancers and the 3% marketplace fee you charge clients for no obvious benefits is bad in its own right, but even so, it is prohibitively expensive for the small tasks we sometimes hire on Upwork. Does removing all small projects off the platform make the platform better or worse for the freelancers?

nemus-ns
Community Member

Time to leave this sinking ship. They're so greedy that they want to take 10% of my earnings with my long term client for basically just processing a payment. No thanks!

ericaandrews
Community Member

This part is TERRIBLE news for people that do long-term contracts or do work with REPEAT clients: "The new rate will go into effect on May 3, 2023 and our existing tiered fee structure will be retired. For those of you currently working on projects at the 5% level of our existing tier structure, we are pleased to honor those rates through the end of 2023." Also, I did not receive this message, but this basically means Upwork will start skimming 10% off the top INDEFINITELY, creating NO incentive for establishing long-term relationships with clients or for earning more and more on a contract. A completely ridiculous money grab.

ericaandrews
Community Member

https://community.upwork.com/t5/Product-Release-Notes/Announcing-new-simpler-fees-on-Upwork/ba-p/127...

 

This part is TERRIBLE news for people that do long-term contracts: "The new rate will go into effect on May 3, 2023 and our existing tiered fee structure will be retired. For those of you currently working on projects at the 5% level of our existing tier structure, we are pleased to honor those rates through the end of 2023." Also, I did not receive this message, but this basically means Upwork will start skimming 10% off the top INDEFINITELY, creating NO incentive for establishing long-term relationships with clients or for earning more and more on a contract. A completely ridiculous money grab.

 

What is the incentive to stay with the same client for a long time or to keep working with the same client multiple times on different contracts if you get charged the same FEE no matter how much you earn with the client. What this also means as that freelancer EARNINGS overall are going to go DOWN for people in these situations: People that retain long-term clients or people that do multiple contracts with the same clients over and over.  Basically, after 2023, no matter how hard you work to keep long-term or 'repeat' clients, there is no reward for doing so.  There's a BIG difference in snatching 10% out of every weekly pay versus 5%.  The initial 20% to start a contract up to 500, and then 10% until 10,000 never bothered me, because I would blow through the 500 'marker' in a couple/few hours and 10,000 not long after that.  So, basically, I'll be LOSING earnings and Upwork will be making more PROFITS off my work.  I don't understand why Upwork insists on finding new ways every day to RUN their top performing freelancers OFF the platform. Terrible business model.

sealvlservices
Community Member

Wow, this topic blew up! I will say also that it's a little misinformed to say that charging a 10% fee is going to help drive more clients our way, in most cases the client has no idea that we even pay a fee, and as long as they aren't paying it, they really don't care. On the other side, charging the client $2.95 to initiate a contract could be a deterent for them, so I'm kinda not seeing the benefit for the freelancer other than saving 10% for working with a new client.

gemmharbanawa
Community Member

I will advocate for our company to veer away from Upwork before this even happens. We have 100+ freelancers in the company, all working long term that are disappointed by this. Whatever it takes, we'll find a different payroll system.

tyom00
Community Member

This is already a robbery, if I work with a client for more than 4 years and I have already reached more than $20,000, why are you going to raise the percentage from 5% to 10%, with that you will lose more clients, and many will lead to customers out of Upwork I don't agree with this new rule it's a real steal of our money and effort!!!!!!

If you have worked for a client for 'more than 4 years', you actually can take the client entirely OFF Upwork altogether and pay NO 'freelancer' Fees at all.  After 2 years, you are no longer required to work with the client through Upwork.  You and/or the client can just close the existing contract and setup one offline where you get to keep ALL the money you earn.

The client still need to initiate the process and pay the $1.00 Conversion fee.

The steps are described in the help article below.

Why Can't I Get Paid Directly? โ€“ Upwork Customer Service & Support | Upwork Help

Getting paid through upwork is convenient for both my clients and myself. After 2 years upwork is just skimming, but it still represents a convenience. An increase of 5% on my contracts is pure profit for upwork. I do not want to subsidize the costs of early work for other people or fat for corporate. If someone can enumerate exactly why they need this other than to line their pockets, please do. I pay my 20% then 10% to cover the mechanisms that upwork provides for setting up my jobs. They can continue to skim my 5% after 2 years - that's free money for them and convenience for me. To raise the 5% long-term to 10% will mean many thousands of dollars I was previously taking home. I may not find a better platform, but I'm going to start looking around.

 

grandfather existing 5% contracts. Are you so desperate that you need to tap your existing work base? That would suggest you are NOT growing. You should drop connects purchasing and bidding. They are garbage, and suggest blind groping by you (upwork) to find a way to monetize the proposal process. Try to come up with a real strategy and process for improved freelancer search and work proposal management, then perhaps you'll make more money.

sherie
Community Member

How about grandfathering those contracts that are at 5% and only apply 10% to new contracts? We've been loyal to you, this would show the same in return. You have no idea how much business I've sent to you simply by me talking so highly of you. Now this. Your true personality is finally coming out. What next? If you can't grandfather those 5 percenters, then I don't know you. I will refrain from recommending from now on.

 

And one more thing... How about not running so many television commercials in the US? You would save money and not need to charge us more. You think we don't see those commercials? We work from home!!! It seems the five percenters are paying for those commercials.

rosssolutions
Community Member

Did you consult freelancers before making any of these decisions? I am curious what feedback they provided and if you're not currently doing that I strongly suggest that going forward.

bundie702
Community Member

A few years back, when they doubled their fee from 10% to 20%, I was livid. And I really felt for freelancers who specialized in one-and-done assignments--resume writers, for instance. Now I'm thrilled to learn that my fees are going to go from 20% for new clients back down to 10%...but I feel for those whose clients have paid them more than $20k and who will see an increase in the percentage they pay in fees.

 

Why can't Upwork simply continue to take 5% from contracts that have billed $20k or more by the effective date of this change, May 3, 2023? That would make everyone happy. Please consider it.  

robinlcarr
Community Member

This is a penalty for those of us who have long-term clients.  You would think that Upwork would want to incentivize us to stay.  I do not feel the fact that I have no new clients, all being at least a year or more through Upwork, that Upwork raising the fee back to 10% from 5% because it is 'simpler' is in any way beneficial to those of us who are solid long-term performers.

Very disappointed in this decision and will cause me to re-think my Upwork relationship as this represents thousands in additional expenses annually and Upwork stating that honoring through end of 2023 to give me time to renegotiate my rate with clients is not beneficial.

app-ninja
Community Member

Horrible decision! As others mave mentioned, we stand to lose significiant revenue. The current system is fine, why change a good thing... ๐Ÿ˜ž

bayshoreinvest
Community Member

This new fee structure is a BAD idea.  At some point, Upwork ought to listen to and ask the freelancers who make Upwork the most money about these things BEFORE springing it on everyone. 

 

If Upwork wants to make more money, do it by offering more added value options to which freelancers want to subscribe.  For example, I would pay an extra $5/month if I could see when someone else got a contract that I bid on and what that person offered.  Multiply that by a few hundred thousand if not millions every month - THAT's how to bring more to the bottom line wiothout hurting the people who make Uprwork.

 

I don't care so much about the $4.95 per contract, but don't take an extra 5% of long term client income... and in my case that's a lot because I get 70%+ of my business from long term clients. 

 

Whoever is coming up with these ideas is NOT one of your freelancers.

 

costello19
Community Member

Yup, time to move.

rasmussen_shane
Community Member

I think that Upwork should honor any current contracts currently at the 5% range, until end of contract, not -JUST- till the end of the year.

Agreed - Many of us price our services with the Upwork fee's in mind in addition to our cost of business.  This will effectively punish freelancers for maintaining long standing accounts.

Better to just reverse the decision altogether.

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