Upwork charges fees to both clients and freelancers for using the platform. Let's look closer at the fees charged:
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Client fees: Upwork charges a service fee based on a percentage of your total project spend. Depending on your project spend tier, the fee typically ranges from 3% to 5%.
- Freelancer fees: Freelancers pay a processing fee on their earnings, typically around 10%.
Upwork payment methods
Upwork offers various secure payment methods for both clients and freelancers:
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Clients: Upwork offers several convenient ways to fund your account: credit cards, debit cards, and PayPal. U.S. clients with a strong payment history on Upwork can also use an ACH bank transfer. If you choose your bank account as your primary funding method, you'll need a backup payment option (a credit card or PayPal) on your account at all times. This helps avoid any service interruptions in case of bank account issues.
- Verifying your payment method is a great first step on Upwork! It shows freelancers you're committed to your projects and helps establish trust for a successful collaboration.
- Verifying your payment method is a great first step on Upwork! It shows freelancers you're committed to your projects and helps establish trust for a successful collaboration.
- Freelancers: Freelancers receive payments through various methods, including direct deposit, PayPal, and Payoneer.
Direct Contracts
In the previous section, you learned about fixed and hourly contracts. Upwork offers a separate type of contract called a Direct Contract, in which freelancers and clients can connect and establish contracts directly, bypassing the Upwork platform for project management and payment processing. In this type of contract, Upwork involvement is minimal, with no assistance in managing disputes or guaranteed freelancer performance. Not all clients or freelancers qualify for this service.
To learn more about Direct Contracts, read the following articles:
Managing project budgets and escrow
Upwork's secure escrow system ensures safe and transparent transactions. Here's how it works:
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Client funds the project budget: You deposit the agreed-upon budget into Upwork's escrow system.
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Freelancer completes milestones: The project is divided into milestones, and the freelancer receives payment upon completing each milestone and your approval.
- Project completion and final payment: Once the entire project is finished and you're satisfied, the remaining funds are released to the freelancer.
Setting project budgets
When posting a project on Upwork, clearly define your budget to attract suitable freelancers. Consider project complexity, freelancer experience level, and estimated time commitment when setting your budget.
Imagine this
You hire a freelance writer on Upwork to create blog posts for your company website. You set a budget of $500 per post and establish milestones for each completed article. Upwork will hold the $500 in escrow until you approve the first blog post. Once approved, the freelancer receives $500, and the remaining project funds are held in escrow until all articles are completed to your satisfaction.
