Transactions on fixed-price contracts have more complex back-end accounting than on hourly contracts because funds are being moved around in more steps.
Fixed-Price Transaction Process
- Funds are deposited into your account from a billing method
- Funds move out of your account into escrow
- Funds move out of your account to cover the marketplace fee and the one-time Contract Initiation Fee when applicable
- When releasing payment, funds are deposited back in your account from escrow
- Funds are sent from your account to the freelancer or agency
On the transactions report, these steps will not appear in this order. For example, on the report, funds going from your account to escrow is the first step. The report shows transactions in the order they are processed by the system. If that looks confusing to you, just know that the steps above are what’s happening.
Offer deposit and funding additional milestones
Hiring offers and new milestones ask you to pre-fund the agreed amount into escrow, with a required minimum of $5 per milestone. This will trigger three transactions on your Reports › Transaction History: one credit and two debits.
|
Transaction Type |
+/- |
Where is the money going? |
|
Payment |
Credit |
Into your account from your billing method |
|
Fixed Price |
Debit |
To escrow to fund the milestone (or full contract) |
|
Marketplace fee |
Debit |
To Upwork for this deposit’s marketplace fee |
Approve a milestone payment
When you approve a milestone, the system moves funds from escrow to your account. Then, the money will be transferred from your account to your freelancer or agency. Therefore you’ll see two new items on your Reports › Transaction History page.
|
Transaction Type |
+/- |
Where is the money going? |
|
Payment |
Credit |
From escrow into your account to pay the invoice |
|
Fixed Price |
Debit |
From your account to the freelancer to pay the invoice |
Adding extra to a milestone or sending a bonus
This example shows a client releasing more than the funded amount on a milestone, a total of $13. $10 moves from escrow to the client’s account to the freelancer. The additional $3 is sent to the freelancer separately (shown on your report as a “Bonus” charge).
Both adding extra to a milestone and sending a bonus separate from a milestone are charged to your billing method without affecting your escrow balance. All bonus, miscellaneous, and hourly payments from the day are batched together and charged to your billing method in a single lump sum. The combined charge to your billing method will have a single payment processing fee line item on your transactions report.
