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What is the Upwork Service Fee?

Jacqueline Pittenger
posted this on February 3, 2013, 10:29 PM

For Clients

Each time you’re charged money on a contract, Upwork receives a share in the form of the Upwork Service Fee. This fee is paid by your freelancer. All rates, bids, and charges you see as a client are inclusive of fees.

For Freelancers

The Upwork Service Fee is 10% of the total amount charged to the client. The fee is paid automatically each time your client is charged on a contract.

As a freelancer, you pay the Upwork Service Fee and it is never shown to your clients. Always talk to your clients about total charges, inclusive of fees, because they will only see the total billing rate or bid on your job applications, contracts, and profile.

Most of your reports show only total charges, inclusive of fees—same  as the client would see. Fees are broken out in your Transactions and Earnings Reports. The total billed is your legal income and the fees paid may be deductible business expenses.

For new Upwork contracts with clients you have previously worked with on Elance, the service fee will be 8.75% or whatever rate you previously paid on Elance. All client-freelancer working relationships that began on Elance but have now transitioned to Upwork are eligible for this fee.

Rate Calculator

Anytime you see the rate calculator, it will estimate what you’ll earn (net take-home pay after fees) to help you bid accordingly. We say “estimated” on the hourly version, because rounding may occur when the hours are invoiced (see examples below). We charge the client the exact billing rate you enter. Sometimes the resulting 10% fee is a number with more than 2 decimal points that must be rounded to the nearest cent with each transaction.

We don’t say “estimated” on the fixed-price version, because we assume it’s invoiced in a single transaction, with the rounding as shown.

Example Fee Calculations

Earn18.png1) No rounding, estimate and earnings always match.

$20 per hour is charged to the client. 10% of that is exactly $2 per hour. The rate calculator estimates you’ll earn $18 per hour. No rounding is necessary, so your net earnings always match the estimate.

Earn20.png2) Rounding results in earnings slightly less than estimated.

You want to earn $20 per hour, so you use the rate calculator to estimate that you need to charge the client $22.22 per hour. 10% of that rounds to $2.22 per hour.

  • Billed 1 hour:  
    • Your client is charged $22.22 (1 hour x $22.22).
    • The 10% fee is $2.222 or $2.22 when rounded down.
    • Your net earnings are $20.00 (same as estimated).
  • Billed 12 hours:  
    • Your client is charged $266.64 (12 hours x $22.22).
    • The 10% fee is $26.664 or $26.66 when rounded down.
    • Your net earnings are $239.98 ($0.02 less than estimated, 12 x $20 = $240).
  • Billed 39 hours:
    • Your client is charged $866.58 (39 hours x $22.22).
    • The 10% fee is $86.658 or $86.66 when rounded up.
    • Your net earnings are $779.92 ($0.08 less than estimated, 39 x $20 = $780).

Earn25.png3) Rounding results in earnings slightly more than estimated.

You want to earn $25 per hour, so you use the rate calculator to estimate that you need to charge the client $27.78 per hour. 10% of that rounds to $2.78 per hour.

  • Billed 1 hour:  
    • Your client is charged $27.78 (1 hour x $27.78).
    • The 10% fee is $2.778 or $2.78 when rounded down.
    • Your net earnings are $25.00 (same as estimated).
  • Billed 12 hours:  
    • Your client is charged $266.64 (12 hours x $27.78).
    • The 10% fee is $33.336 or $33.34 when rounded down.
    • Your net earnings are $300.02 ($0.02 more than estimated, 12 x $25 = $300).
  • Billed 39 hours:
    • Your client is charged $866.58 (39 hours x $27.78).
    • The 10% fee is $108.342 or $108.34 when rounded up.
    • Your net earnings are $975.08 ($0.08 more than estimated, 39 x $25 = $975).

 


Please contact Customer Support with any questions or concerns regarding the Upwork Service Fee.

 
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