If there’s one thing guaranteed to get the jungle drums banging in the world of freelancing, it’s a change to Upwork fees for freelancers. A BIG change to the fees, which will force all Upwork freelancers to pay for “Upwork Connects” in order to bid for jobs, was announced in April 2019.
This article explains all of the key Upwork fees for freelancers. It looks at the 2019 changes (which are proving extremely controversial) and discusses how much freelancers have to pay for Upwork Connects.
I also potentially add to the controversy by giving my own opinion on Upwork’s fees 🙂
What is Upwork?
Just in case you’ve been living in a cave, Upwork is a huge online freelance work platform. With over 100,000 freelance gigs on offer at any one time, and 12 million registered freelancers on the platform, it’s a huge part of the online freelancing world.
It is fair to say that Upwork has a mixed reputation. With so many people on the platform there are plenty of scams to avoid. Equally annoyingly, there are plenty of “bottom feeder” clients, who expect the earth for ridiculously low rates. Differing costs of living across the world play into this too, as this article on cultural awareness around freelancing explains.
Upwork Fees for Freelancers
Aside from the scams and the cheapskate clients, the thing that seems to incense people more than anything is Upwork’s fees for freelancers. It’s fair to say that Upwork fees can eat significantly into users’ freelance earnings.
For example, Upwork charges freelancers a 20% commission on work up to the value of US$500 (with each client). The commission rate drops for higher value projects, with 10% charged between US$500.01 and $10,000, and 5% once an individual client has spent over $10,000.
These fees are undeniably significant. If you do a $500 job for a new client, Upwork take $100 for themselves. This means you’re only left with $400, and that’s before you start thinking about PayPal fees and currency conversions, let alone tax or other business costs.
However, despite these big fees, it’s long been possible to use Upwork and apply for jobs without paying for a membership. Effectively, for freelancers, this means not paying any Upwork fees until you’re actually earning.
The changes announced at the beginning of April 2019 see an end to that system. Many freelancers regard them as a serious blow, or for some, “the final straw.”
Upwork Fees: The Old Way
The new Upwork fee structure is in effect from May 2019. Until then, it’s possible (and always has been possible) to use Upwork as a freelancer with a free “Basic” account. With this kind of membership, you pay Upwork nothing until you owe commission on successfully completed work.
In order to apply for jobs on Upwork, you use a system of “Upwork Connects.” Freelancers choosing to use Upwork with a “Basic” (free) plan under the old regime were given 60 free Upwork Connects each month. Between two and five were required to apply for each gig.
There has long been an option of a paid subscription, with “Freelance Plus” members getting more Connects, the ability to roll them over between months, and a host of other benefits. The key difference under the new system is that nobody gets free Connects any more. This means freelancers have to hand over money to pitch for jobs – effectively paying Upwork before securing any work.
The New Upwork Fee Structure for Freelancers
As far as we’re aware at the time of writing, the commission fees Upwork charges on completed work remain the same. The big difference is the new charges for Upwork Connects.
Freelance Plus Subscribers
I am personally a Freelance Plus subscriber on Upwork, so I’ve long been paying $10 per month. On 2nd April 2019, I received an email informing me that this fee will increase to $14.99 per month from May. For this I will continue to receive 70 Upwork Connects per month, and have the ability to roll over up to 140 from month to month.
Basic Upwork Members
The most significant (and controversial) change is that Upwork freelancers with Basic (free) accounts will no longer be given 60 free Upwork Connects each month. This means that from May 2019, no freelancer on Upwork can apply for any gigs without having a paid membership, or by buying Connects individually.
How Much do Upwork Connects Cost?
From May 2019, the price of each Upwork Connect is 15 cents (US$0.15).
Each gig application uses between one and six Connects, depending on the contract value. As such, firing off an application for a “six Connect” job costs 90 cents.
While this is a comparatively small amount of money, it’s important to note that this fee applies simply to apply for work. There’s no guarantee of winning any work as a result of a bid.
To put this in perspective, active Upwork freelancers who were using all of their Connects each month will, from May 2019, pay US$9 per month to fire off the same number of applications.
Free Upwork Connects
Documentation around the new Upwork fees for freelancers also points out that “top rated” and “rising talent” freelancers will be given some free Connects. This provides an incentive for freelancers who are proven to continually produce high quality work.
How About Jobs Freelancers are Invited to?
One key point to remember is you don’t need to use any Upwork Connects if you are invited to apply for a specific freelance job.
This is perhaps more significant than it sounds. Once you are established and successful on Upwork, people begin to come to you, rather than you going to them. Some freelancers, my wife and I included, only really work via Upwork when people approach us on the platform. For Upwork freelancers who work in that way, these changes will have limited effect.
The reaction to these Upwork fee changes has been predictable, and you don’t get a medal for guessing the general theme! Forums (like this one – running to dozens of pages), are full of outrage, with Upwork being described as “greedy,” “brain dead,” and “mean and unfair.”
On a simplistic level, I do understand why people are railing against additional Upwork fees. Upwork is already known to charge significant commission on work freelancers complete through the platform. Doing $500-worth of work and handing Upwork $100 of it for “nothing” has always stung, and always will. However, those charges are really the subject of a whole different discussion.
When it comes to these new charges for Upwork Connects, I can actually see a number of clear positives, which I shall now defend.
Among the angry forum posts are a handful of isolated freelancers who think these changes to the Upwork fee structure are a GOOD thing.
I agree with them.
In recent years, I’ve used Upwork at least as much to hire freelancers as I’ve used it to work on the platform. When you place an advert on Upwork, you brace yourself for an inevitable onslaught of time-wasting, poorly written applications. Many of them come from completely inappropriate freelancers who’ve clearly not read the requirements or assessed their suitability for the gig.
If having to pay 30-90 cents to put in an application for each gig is going to eliminate most of these people from Upwork, that’s a good thing.
And it’s not only a good thing for employers. It’s also good if you’re a professional freelancer who’s taking your work seriously. This is because your own good application isn’t going to have to fester in a pile of rubbish that the client has to wade through.
Keep in mind here that under the “old” system, 60 free monthly Connects gave every crap freelancer the opportunity to send out up to 30 crap applications – without spending ANY money. With all of this “noise” removed from the platform, the end result should be something far more streamlined and far more professional.
I do sympathise with novice freelancers, and those on a really tight budget. This is especially the case for those in less developed countries, where 50 cents is a far more meaningful amount of money than it is in the western world.
But ultimately, $10-15 per month isn’t a big investment in a career. If you think back to the days when people would pay to advertise in the phone book or the local paper, that was just a business running cost that any small business would be prepared to bear.
To my mind, what these changes will hopefully do is sweep away the many, many people who, in truth, had no business cluttering up the platform by applying for jobs they stood no chance of getting. They are changes that have actually inspired me to take a fresh look at a platform that could – hopefully – become more attractive to professional freelancers, and to high quality clients.
However, I do feel that in return for these changes, Upwork needs to do more to support their freelancers, and make the platform a fairer place. So let’s look at that.
What I’d Like to See from Upwork
If Upwork are now charging freelancers merely to apply for jobs, I hope that they will recognise that this means the freelancers are their clients too.
As such, I’d like to see:
- Consideration given to reducing the commission on completed jobs, especially on the 20% rate charged on low value (sub $500) contracts. These hit novices particularly hard.
- Far more proactive efforts to clamp down on scams on the platform. The scam I described here comes up time and time again.
- Improvements in Upwork’s technical infrastructure and reliability (which will hopefully happen naturally as a result of less traffic going through the system). An update to the user interface, which has been largely untouched for years, wouldn’t go amiss either.
Whether these things happen remains to be seen. A decrease in commission seems unlikely, but it would be a gesture to those still willing to – now quite literally – invest in their career by using the platform.
These changes to the Upwork fees for freelancers have been huge news in the freelancing community. As with everything, it’ll all calm down in time, and people will get used to the new way of doing things.
I will reiterate that I personally believe these are GOOD changes. Every rubbish job application that’s eliminated from the platform because a 30+ Cent fee gives pause to the person about to send it is a good thing. It’s good for the clients, and it’s good for the freelancers who are making more of a professional effort.
Obviously it’s very…convenient for Upwork that these new fees will make them a bunch more money. However, it’s not sustainable for the platform to get bigger and bigger, when much of that bulk comes from users on a free plan who are making Upwork worse, not better.
In the run-up to these Upwork fee changes, I heard from more and more people – often perfectly credible people – who had been turned down to join Upwork. I see these changes as a way to clear out a lot of the existing clutter and make room for those people.
How it all turns out in the long-term remains to be seen, but you can be sure I’ll write about it. Once the changes take effect, I intend – as an experiment – to spend some time working more actively on the platform myself to create an ultimate Upwork review. I’ve always been more positive about Upwork than many, and have found great long-tem clients there, and on oDesk and eLance before that.
I’m hopeful that these changes are going to mark the start of a new era.
Alternatives to Upwork
As I think it’s inevitable that some freelancers are going to look to move away from Upwork, I commissioned a new article rounding up alternatives to Upwork, which you’ll find here.
What do you think about the changes to Upwork fees for freelancers? Share your opinions in the comments.