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In this marketplace of work, individual talent is valued, and agencies can seamlessly connect with and hire contractors for jobs. When it comes to the popular freelance job marketplace Upwork, they maintain certain policies that safeguard clients and freelancers.
However, after a new fee policy change, Upwork now charges their clients and freelancers a fixed fee for each job. Depending on how much you charge and the type of projects you run, this can cut your profit as a freelancer and make it more difficult to earn a better income.
In this article, we’ll outline how you can minimize Upwork fees and effectively work your way through these hikes.
How Do Upwork Fees Work?
Let’s talk about the Upwork fees structures and policies regarding payments. The recent update in Upwork fees brought about a lot of pushback from some freelancers.
Formerly, freelancers had to pay Upwork a commission for every job they completed. Based on their relationship with the agency or company hiring them, they will have to pay:
- 20% on the first $500 with a client. This means if you get paid $100 on a job, you’d only make $80.
- 10% for amounts between $500 and $10,000
- 5% for invoices that go beyond $10,000
With the new update, Upwork established the following as the standard:
“Beginning May 3, 2023, we are moving all freelancers to a 10% fee rate and retiring our sliding scale fee structure. For those 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.
Beginning April 26, 2023, we’re implementing a client contract initiation fee of up to $4.95 on Upwork’s Marketplace and Project Catalog. This is a once-per-contract fee, assessed when clients make their first payment to a freelancer.”
Reasonably, the company faced a lot of criticism from freelancers who had already passed the 10% threshold with one or more of their clients.
But we’re here to tell you that there are still ways to use this platform cleverly, minimize your fee costs, and get the best out of this service as possible. You can achieve a sizable income on Upwork, even now.
This brings us to our next topic.
How Can You Minimize Upwork Fees?
As a top-rated plus Upworker, there are certain nuggets of knowledge I’ve picked up over time in order to succeed on Upwork and earn money. Here are 9 ways you can reduce Upwork fees!
1. Pay Attention To Large, Long-Term Contracts
The more you charge, the less the fees will impact you.
Don’t let the big number scare you—if you spend a long time with a larger contract or client, you can make a lot more and avoid worrying about the 10% flat fee.
Invest your time in these larger projects to reap the benefits later. Increase the quality of your work (and clients) to make more as an Upwork freelancer.
2. Use PayPal Instead Of Credit Cards
Use different forms of payment to see which one reduces services fees and conversion taxes the most.
PayPal and other modes of electronic transfer eliminate processing fees, helping you save more and ensuring that most of your billed amount goes into your pocket.
3. Build Trust And Identify The Right Clients For You
This is a crucial step to building your Upwork portfolio and getting that 100% Job Success Score (JSS). Working with clients for a long time lets you build a relationship of trust with them.
Upwork rewards this by automatically dropping fees to 5% after you’ve done a considerable amount of work with one client. Find the agencies and employers that are the right fit for you.
This will help increase job satisfaction and growth at the same time.
4. Upgrade To A Plus Account
For just $14.99 per month, Upwork can help you get more and better jobs.
The benefits of having a Plus account include getting more Connects per month.
With a Plus account, you can get 60 Connects each month. This helps when you’re just getting started and need to build your profile from scratch! The more Connects you have, the more jobs you can apply for and the more you’ll earn.
5. Be Aware Of Fee Policy And Changes
Keep yourself updated with changes in Upwork’s policies, terms and conditions. This ensures you make the most of your earnings and are aware of ways to maximize the amount that goes into your pocket.
6. Bring Your Own Client To Upwork
You’d be happy to know that Upwork has a “Bring Your Own Client to Upwork” program. You could ask your own clients that you work with independently to create a client account on Upwork.
This completely eliminates any fee or commission you would have to pay. After they set up their account and invite you for a job listing, you can accept. Shoot an email to [email protected] with the contract number of the job.
Voilà! Upwork rewards you for adding another client user to their base by removing all fees. Personally, I’ve used this feature loads of times with old clients and the seamless platform of Upwork has benefited both parties.
7. Take Clients Off Upwork After 2 Years
If you’ve created a good relationship with a client or agency, you can take them off Upwork after 2 years. After the 2-year mark, if you still aren’t happy with Upwork’s fee cuts, you are legally allowed to ask your client to leave the platform.
This ensures that they pay you directly, with no percentage of the invoice being taken by Upwork.
In my experience, there’s nothing wrong with this option, but freelancers and companies do miss the seamless transaction of money transfers and periodic billing dates that Upwork provides.
The catch is that there are also some risks involved. If you take the client off of Upwork before the 2-year mark, your account could run the risk of a suspension.
Suspensions are temporary but, if levied enough times, they can become permanent. Getting out of paying a small commission simply isn’t worth risking a suspension or termination on such an established platform.
Tips To Keep Going On Upwork Despite Fees
Choose Quality, Not Quantity
While it may be tempting to take on many small projects at once to get cash quickly, this won’t do much to reduce the commission fee. Companies are looking for dedicated people who can commit to them for a long time.
Put in the hours with every client you take on and deliver amazing work. This will help you justify raising your rates as a freelancer.
Write Catchy Proposals
Create engaging, catchy, and out-of-the-box proposals for clients when you bid for jobs. Show them unique ways you can deliver what they want. This will give you an edge over the competition!
Market Your Services
Use all the resources at your disposal to market your service. Social media is the best way to tell the world what you’re about and make your presence known. The best part? It’s absolutely free!
LinkedIn is a powerful tool to find all kinds of work. Add your accomplishments, educational degrees, work experience, and skills to create a strong profile. Write a compelling ‘About’ section, and don’t be afraid to get people to endorse your skills.
Enlist all the services you offer in an engaging way to attract employers.
Don’t Stop Those Cold Emails
Maintain your profile on Upwork and be as consistent as possible, but don’t restrain yourself to just one platform. Use word of mouth to learn about new clients looking for work, and create a cold email you can send to agencies offering your services.
Don’t let those troublesome fees bring you down. While I agree that giving away chunks of your first few payments does not seem ideal, Upwork is worth it in the long run.
What you’re doing on Upwork is essentially building a network of clients who trust you and appreciate your work. Over time, those fees will mean nothing. The experience will help you take on larger projects, increase your legitimacy, and get you so much work that a 5% deduction (or a 10% fixed fee) will hardly be noticeable.
Take it from someone who’s been there—the hard work and wait are worth it!
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