Upwork connects businesses with freelance talent, handling payment processing for remote work. In exchange, Upwork charges service fees to freelancers as its monetization model. But how much exactly does Upwork take from earnings? This guide examines Upwork’s fee structure and how to optimize it.
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Overview of Upwork Service Fees
Upwork currently charges freelancers either a 5% or 20% service fee on client payments for jobs completed through their platform. The fee depends on your lifetime billings with Upwork:
- Less than $500 lifetime billed: 20%
- More than $500 lifetime: 5%
Upworkwithdraws fees when clients pay invoices. So with $100 earned on a job, you would receive either $80 or $95 depending on your billing tier.
Rising Through Tiers
All new Upwork accounts start at the 20% service fee tier. You can then progress down to lower tiers:
- 20% fee – Up to $500 lifetime billed
- 10% fee – After $500+ billed
- 5% fee – After $10,000+ billed
Once your reach a tier with over $500 in lifetime billings, the lower rate locks in permanently. Continue delivering great work to keep climbing tiers.
Only Charged on Client Payments
Importantly, Upwork only deducts the percentage fee from actual client payments to you. No fee applies for submitting proposals, communicating via Upwork’s platform, or any other unpaid work. Fees only come from paid jobs.
Automatic Deduction Upon Payment
You do not pay any upfront fee to use Upwork’s services. The service percentage is automatically deducted from client invoices when they are paid to you through Upwork’s managed payments system.
For fixed price jobs, fees are taken once the full payment is released after work is approved. For hourly jobs, deductions occur each period after hours are approved.
Per-Client or All-Client Billing Basis
Upwork determines your lifetime billed amount based on whether you use per-client or all-client billing basis:
- Per-Client – Your tier is calculated separately for each client. So you could be at 5% for some clients and 20% for others.
- All-Client – Your lifetime billed amount is aggregated across all clients. Once you exceed $500 total, the lower 5% rate locks in for all clients.
Choose your preferred billing basis in Account Settings.
No Fees for Out of Platform Payments
Note that if a client pays you directly outside of Upwork’s payment system, no fee applies since Upwork provided no payment processing. But the payment won’t count toward lowering your tier either. Ensure most payments happen on-platform.
Tips for Minimizing Fees
- Fill your profile completely to attract clients faster.
- Bid for high quality, high paying jobs where 5% is a smaller portion.
- Specialize in an in-demand niche to win projects consistently.
- Develop trusted repeat client relationships.
- Take tests to prove your skills and raise your rate.
- Withdraw funds frequently rather than letting them build up.
Delivering outstanding work for satisfied clients is the fastest way to increase earnings and move into lower fee tiers on Upwork.
Frequently Asked Questions
Does Upwork charge any other fees besides the service percentage?
No, the service fee percentage is the only fee Upwork charges freelancers. There are no listing fees or recurring membership costs.
When can I withdraw my earnings?
Funds are available for transfer out 5 days after submitting approved work, once the waiting period passes. No minimum threshold to withdraw.
Do bonuses and tips from clients count toward my billed amount?
Yes, any money received through Upwork payments contributes to your lifetime billed amount and fee tier eligibility.
What happens if I issue a partial refund?
Refunded amounts deduct from your lifetime billed amount and could bump you back down to a higher fee tier if they bring you below a threshold.
Can I move back to higher fee tiers by not working on Upwork?
No, you permanently lock in each lower tier once surpassing the lifetime billed thresholds. You would stay at 5% even with no activity.
Do freelancers see the full payment before or after fees?
You see both the client payment amount and your net payout after Upwork’s service fee is deducted.
Knowing Upwork’s simple fee structure allows you to maximize your earnings. Consistently deliver 5-star service to ensure your Upwork income continues growing.