Direct Contracts with Freelancers

Upwork is the world’s largest online freelance marketplace, with freelancers and agencies specializing in a wide range of services from product marketing to web development. With Direct Contracts, your freelancer uses Upwork to set up contracts and get paid. You enjoy the benefits of escrow service and easy payments without having to create an Upwork account or pay fees.

How it works

Direct Contracts allow you to work with freelancers on Upwork when you don’t have an Upwork account. There are no costs associated with using this service, you only pay the value of the contract. 

With escrow service, your funds are protected and won’t be released until the work has been completed. This gives your freelancer assurance that the project funds are available, and they can be certain of your payment upon the successful completion of the job. You also have the ability to cancel the contract at any point before you approve the release of funds. If you cancel, the funds are returned to your original payment method within seven business days.

All Direct Contracts will be managed by email. We’ll provide you with simple, easy-to-follow instructions every step of the way. We’ll also send you invoices with all the relevant contract details, including the contract name, description, price, your company name, and the freelancer’s name. 

Freelancers with Upwork accounts can create and send contract proposals, for a single fixed-price amount, to their clients that aren’t registered on Upwork.

To review and accept a Direct Contract

Once a freelancer has sent you a Direct Contract offer, you’ll receive an email from Upwork detailing the freelancer’s proposal. You will receive all the key information, including the contract amount, title, and description. You will have the option to either “Accept and Fund Contract” or “Decline.”

Funding a Direct Contract

After you have agreed to the terms of the contract, you’ll be asked to deposit the funds for the contract in escrow via a credit card or PayPal. Once you have deposited funds, the contract starts and your freelancer can begin the project. All transactions will take place in USD.

Your freelancer may choose to add milestones to a Direct Contract to divide the job into a series of phases, due dates, or deliverables based on your needs. Milestones are individually funded, and provide a way to work through a large project in smaller steps.

If your contract has milestones, you will only need to fund one milestone at a time. For example, if the contract has five milestones at $100 for each milestone, the contract total is $500. However, you'll only need to fund Milestone 1 with $100 to get started. Once that milestone is complete, you can choose to fund and activate the next one. 

Reviewing Payment Requests

Once the freelancer has completed and submitted work for the project, they will send you a request for payment. You’ll receive an email notification with the option to “Accept” or “Decline” the request.

If you accept the request, the funds are immediately released to the freelancer and the contract is closed. 

If you reject the request, the funds remain in escrow and the contract is kept open, the freelancer can then make any necessary changes to the work and resubmit their payment request.

Important note: When your freelancer submits a payment request you have 14 days to review. If you do not take action, that is considered approval and funds will be automatically released to the freelancer.

 

Why would I use this instead of my current method?

With Direct Contracts, you and the freelancer get escrow protection in addition to the ability to easily make payments through Upwork. Freelancers feel assured because you’ve deposited the project funds into a third-party escrow partner and you don’t have to worry about paying for a project that doesn’t get completed or filing tax forms. If during the contract you want to cancel it, you can request to cancel and get your funds returned back to you.

What’s the cost to set up a Direct Contract?

The cost to clients is zero -- you only pay the cost of the project. All transactions will occur in USD.

Do I have to create an Upwork account?
No, you will not have to create an Upwork account. Any time action is needed on your part we will send you an email and link to the webpage where you can take the needed action.
Can I set up a Direct Contract with anyone, anywhere in the world?

Currently, Direct Contracts are only available to freelancers and their clients in certain countries. If you attempt to sign up and you or your client are not eligible due to the country you live in, you’ll see this message: “We’re sorry to inform you that Direct Contracts are currently not available in your country.” We hope to expand Direct Contracts to more countries in the future.

What are Upwork escrow services?

With Direct Contracts, you and the freelancer get escrow protection in addition to the ability to easily make payments through Upwork. Freelancers feel assured because you’ve deposited the project funds into a third-party escrow partner and you don’t have to worry about paying for a project that doesn’t get completed. If during the contract you want to cancel it, you can request to cancel and get your funds returned back to you. You’ll also get dispute assistance should a problem arise.

Can I fund a Direct Contract via PayPal?

Yes! Users can fund Direct Contracts via credit card or their PayPal account.

How do I view my contract?

When you accept the contract, you’ll receive an email confirmation. That email will have a link to allow you to view the contract and request cancellation in case you decide to cancel an active contract.

How do I file a dispute if I'm not satisfied?

With escrow service, your funds are protected and won’t be released until the work has been completed. Once the freelancer has completed and submitted work for the project, they will send you a request for payment. You’ll receive an email notification with the option to “Accept” or “Decline” the request.

If you accept the request, the funds are immediately released to the freelancer and the contract is closed. If you reject it, the funds remain in escrow and the contract is kept open. The freelancer can then make any necessary changes to the work and resubmit their payment request.

Important note: When your freelancer submits a payment request you have 14 days to review. If you do not take action, that is considered approval and funds will be automatically released to the freelancer.

How do you handle the U.S. tax filings?

To learn more, click here.

 

 

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