If there’s one thing guaranteed to get the jungle drums banging in the world of freelancing it’s Upwork fees for freelancers.
Many freelancers were already critical of Upwork’s fees when the platform implemented a BIG change a couple of years ago. The changes forced all Upwork freelancers to pay for “Upwork Connects” in order to bid for jobs. This caused some freelancers to abandon the platform (or at least say that they would!)
This article explains all of the key Upwork fees for freelancers, including the controversial changes made in 2019, so that you can understand what the fuss was about and decide if the platform is right for you.
I will also potentially add to the controversy by giving my own opinion on Upwork’s fees 🙂
WHILE YOU’RE HERE: Be sure to also check out our guide to Upwork taxes.
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. (We have a huge review of Upwork here).
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.
The commission fees Upwork charges on completed work did not change in 2019 so the big difference between the old and the new Upwork fees for freelancers is in the new charges for Upwork Connects.
In order to apply for jobs on Upwork, you use a system of “Upwork Connects.” Between two and six Connects are required to apply for each gig.
Freelancers choosing to use Upwork with a “Basic” (free) plan under the old regime were given 60 free Upwork Connects each month. These free Connects were taken away by the changes.
The response from the freelance community was so vehement that it resulted in Upwork adding 10 free Connects to all plans. Still, no freelancer on Upwork can really apply for many gigs without having a paid membership, or buying Connects individually.
Freelance Plus subscribers on Upwork saw their fees jump from $10 to $14.99 per month in May 2019. The number of Connects offered with this plan remained 70, although Freelance Plus subscribers now also receive 10 additional free Connects.
How Much do Upwork Connects Cost?
The price of each Upwork Connect is 15 cents (US$0.15) and you can purchase bundles of 10, 20, 40, 60, and 80 Connects.
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 started having to may US$9 per month to fire off the same number of applications, once the changes were made.
Are There any Restrictions on Upwork Connects?
Upwork connects are only valid for one year and there is a limit to how many you can have. Even though both the Basic and Freelance Plus plans allow users to roll over up to 200 Connects, the total number of Upwork Connects you can have is 200 (Agencies can have and rollover 400).
These limits are rather low given the feast or famine nature of freelancing. There really is no good reason (other than for Upwork to make more money) to not allow a freelancer to keep all of their paid Connects indefinitely.
Can you Still get Free Upwork Connects?
Upwork has tried to soften the blow of their fee changes by giving 10 free Connects and allowing users to earn Upwork connects.
Registering with Upwork for the first time earns you 40 Connects, and completing the Upwork Readiness Test gives you another 40. This does help new freelancers on the platform but it also masks the true cost until the freelancer is invested in it.
Other ways you can earn Connects are by winning an interview, completing an Upwork Skill Certification, or earning a badge. “Top rated” and “rising talent” freelancers may be given some free Connects as well.
Free Upwork Connects may be nice, and boost your ability to apply for work a tiny bit, but the reality is that they are perks designed to make you invest more heavily in the platform.
Do you need Upwork Connects for Jobs Freelancers are Invited to?
One key point to remember is you don’t need to use any Upwork Connects if a client invites you 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, the changes made have a limited effect.
Upwork Fees For Employers
Upwork offers three different plans to those looking to employ freelancers on the platform:
- Upwork Basic: This plan allows access to all the freelancers and agencies on Upwork but little else. The plan itself is free but employers still need to pay a 3% payment processing and administration fee for each job.
- Upwork Plus: For $49.99 per month, in addition to the 3% administration fee, businesses get dedicated support, tools to simplify working with freelancers, and a variety of perks to help their business draw the attention of top freelancers.
- Upwork Enterprise: This plan is for those who want to integrate freelancers into their business and so the benefits and fees will vary from company to company.
It is worth noting that in these plans the employers are really not paying for the use of Upwork, but rather for the additional tools and services. It is a clear indication that Upwork considers the employers as their clients, not the freelancers.
How Important was the Change in Upwork Fees?
The reaction to the Upwork fee changes was 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 railed 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:
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.
I liken Upwork connect fees to what you would one day have spent on stamps to send off written applications.
To my mind, these changes helped to 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.
The changes 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.
How Do Upwork Fees for Freelancers compare with Other Platforms?
Ultimately your decision to work on Upwork will be determined more by how its services and fees compare to other platforms, rather than how they have changed their fees.
A quick look at the some of the established platforms shows that Upwork’s model and fees are fairly common.
Upwork vs. Freelancer vs. PeoplePerHour
Fees on Freelancer
Freelancer is another major player that has a similar fee system to Upwork. It’s actually a little more complicated.
In essence, you get a limited number of bids according to the level of your membership plan. You use these when applying for jobs. Unlike Upwork, you cannot purchase additional bids but must rather upgrade your membership plan if you need more. This is why they need to offer five different paid plans in addition to the free plan. The paid plans range from $0.99 to $69.95 per month.
Comission fees are also more complex than Upwork, although significantly lower. Freelancer charges a flat 10% on hourly projects, 10% or $5 on fixed price projects, and 20% on services. The kicker is that Freelancer charges its comission fees upfront. This means freelancers must pay the platform before they get paid.
PeoplePerHour Fees
PeoplePerHour is a major UK-based freelance platform.
PeoplePerHour uses the term “proposal credits” but, like Upwork, charges users for additional credits. It is a little more generous in that you get 15 free credits per month and each bid only costs one credit. But even if you purchase a pack of 50 additional credits, you still end up paying around $0.50 per credit (compared to $0.15 on Upwork).
Where PeoplePerHour bucked the trend a little is in reducing its commission back in 2019. Like Upwork, the platform uses a sliding scale to encourage long-term relationships between clients and freelancers. By limiting the 20% fee bracket to the first £250 (c. $350) earned, PeoplePerHour has certainly made its offering more attractive.
Still, little things like conversion rates and minimum service fees mean that the difference between the two is less than it might initially seem.
Hubstaff Talent Fees
Users of Hubstaff Talent are probably doing a double-take here and that is because this platform actually charges NO FREELANCER FEES.
Hubstaff is definitely different from the mainstream platforms and while that can be incredibly refreshing it also comes at a certain cost. There are nowhere near as many jobs available on Hubstaff Talent as there are on Upwork.
If you are looking for a platform with a lot of jobs, a certain level of security in the financial transactions, and ease of use then Upwork is still among the top contenders. This is why, despite the fuss created by the changes in 2019, it remains one of the most popular platforms. But there are some things I would like to see Upwork do better.
Ways Upwork Could Improve
As Upwork charges merely to apply for jobs, I hope that the company will soon 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 has not yet happened and seems unlikely, but it would be a nice gesture to those still willing to – now quite literally – invest in their career by using the platform.
Is Upwork Still Worthwhile?
Upwork has its issues, but it’s still home to thousands of good clients and good opportunities. It’s absolutely worthwhile both for experienced and novice freelancers.
On the other hand, the problem with being one of the biggest freelance platforms is that Upwork can become bloated and loaded with scams. Upwork fees do make it more expensive, but that can actually benefit serious freelancers by filtering out some of the noise.
I dread to think how the influx of freelancers due to COVID-19 would have impacted the platform if the Upwork connect fees had not been in place.
While Upwork commissions are undeniably high, they do improve if you can build a long-term relationship with a client. And that is something that I can guarantee is doable. I have personally found great long-term clients there.
Alternatives to Upwork
Those looking for alternatives will find plenty as the surge in freelancing during 2020 saw the birth of many new work platforms.
Not all platforms are equally good or trustworthy so I commissioned an article rounding up the top freelancing alternatives to Upwork, which you can find here.
Conclusion
Upwork fees for freelancers will no doubt continue to be the subject of much debate, but the reality is that Upwork is not that different from its competitors. While the changes to the Upwork fees were huge news at the time, people have got used to the new way of doing things and for the influx of new users it is just business as usual.
I will reiterate what I personally believe: 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.
Upwork, like other freelance platforms, was slammed with a huge increase in demand in 2020, making it a little hard to truly evaluate the effect of the higher fees. Still, I believe that the changes to the Upwork fees for freelancers was a step in the right direction and hope to see Upwork focusing more on the needs of good freelancers in the near future.
If you are interested in using the platform we have a lot of Upwork articles on the site ranging from an ultimate review to getting approved to tips for success.
What do you think about the Upwork fees for freelancers? Share your opinions in the comments.
Founder of HomeWorkingClub.com – Ben has worked freelance for nearly 20 years. As well as being a freelance writer and blogger, he is also a technical consultant with Microsoft and Apple certifications. He loves supporting new home workers but is prone to outbursts of bluntness and realism.
Thanks for an interesting article. I used to use Elance and was happy with the deal I got as a freelancer. Then it combined with O’Desk and became UpWork. New and increased charges were introduced. I responded by cancelling my paid membership and went back to the basic plan. Then they wanted to start charging freelancers every time they took their money out. If I remember correctly, that was the final straw.
I told my clients I would not work via UpWork anymore. I gave them the choice of paying me directly or finding another writer. They agreed to pay me direct and I closed my UpWork account. I have not regrets at all.
I was curious to see if things have changed (though I would never go back). I still think UpWork is a greedy company. Thanks again for the article 🙂
Thanks for commenting. The fees are certainly steep (it’s the 20% of your income on every client until you’ve earned more that $500 with them that really stings!) However, at those times when you need more clients, it’s a price you can choose to pay for access to lots of potential leads – or at least that’s the way I look at it!
Hi, thanks for detailed explanation.
But however, there is constant feeling that all of burden of getting job falls on freelancers.
There are still too many poorly two lines described jobs “details, etc if offer” from clients who aren’t even verified payments.
I must, for example, bid 20 times even to get reply message, not talking about hiring.
I am of the opinion that this is a good thing. At one point it seemed, there was a very low barrier to entry on the Upwork platform and it became oversaturated. When I attempted to join last year, my application was rejected three times before I was finally approved. The reason given was that there were too many other freelancers with my area of expertise. I ended up hiring a coach to help me through the process- a smart move that paid off.
When I am up against 20 or 30 other freelancers and a job has only been posted in the past 20 minutes, I know that the employer is going to have to wade through a lot of crap before they find my proposal. Weeding out those who should not be applying in the first place is good, and you are absolutely right. It is exactly what is needed to cull the herd.
I am on the $10 a month plan so the only thing really affecting me about this is the monthly rate hike, but I would like to say a few things about the 20% fee.
I despise the 20 percent fee. It is over the top, whether it is for newbies with only a few jobs or experts with contracts in the thousands. 20 percent is a lot of cashola to hand out to a company that is basically offering you nothing in return. There are no perks that make this fee attractive at all.
Right away, I felt I needed to do something about this. My solution is to be perfectly up-front with the client. In my proposal, I fill in a high rate. I preface this right away in the text of the proposal with something that goes like this:
The rate shown is just a placeholder. I prefer to work by the word. Since Upwork charges me 20 percent of all the work I complete, I have two rates. If you would like to keep the project on Upwork, I charge X per word. If we take it off the platform, I can discount that to X per word. I also state that I will send them a separate proposal and contract and the appropriate paperwork.
9 times out of ten, they take it off the platform. Sometimes we will do the first article on the platform and then take it off for subsequent work just so I can have the feedback ranking. Ultimately, the client is happy as they are getting a lower rate, and I am happy because I am getting paid what I want. For those worried about non-paying clients, I am not sure what to say about that. I have had over 20 fabulous clients off of the platform this year and every single one of them has paid me on time and in full. I use AND.CO for proposals, contracts, and invoices, and I believe that helps. I also try very hard to never miss a deadline.
I will likely continue to pay the monthly fee in spite of the fact that it is going up. Mainly because I don’t want the hassle of having to reload connects just to apply for jobs. I do wish they would provide more value for what they take in commission fees. The platform is pretty much self-service so I cannot imagine that overhead costs are too much at HQ.
Adding some type of services like discounts on other products or tools, or just something that would take some of the sting out of that fee would be ideal.
Hi Heather 🙂
I love this comment, and not just because you agree with me 😉
The longer I run this site, the more I’m aware that there are people who work and people who moan. It took you four attempts to sign up to Upwork – but instead of taking to the forums to whine about it you hired a coach and persisted with it, and you’ve now had more than 20 clients. You INVESTED in your career. I suspect that in the same timeframe there have been people who’ve done nothing but complain, failing to realise that venting and feeling hard done by doesn’t pay the bills!
I do think that it’s a bit much for people to whine about things that cost a relatively small amount of money. Before the internet people had to mail off resumés and applications. The equivalent, really, would be to say “well, that job looks PERFECT for me but I’m AFFRONTED that I have to buy a stamp and an envelope so I’m going to let it pass me by instead and go and moan to everyone about it…”
I am, however, also with you on the 20% fee. I suspect Upwork know very well that an awful lot of the best work ends up being quite swiftly moved off the platform. One thing I would say is to be very careful suggesting doing this via their messaging system, as I think it’s against their terms of service and could mean risking a ban.
All the best
I pay the $10. As a professional writer with more than 20 years of published, bylined work I haven’t been hired by anyone.
I have been invited to “interview” for work — often poorly written, vague descriptions for too much work for too little pay. The ad may set a fee of $150 but the application process makes it clear that either 1) additional work must be done to get paid that amount or 2) the cliebt says they just put any dollar amount and applicants must bid.
Then there are those who are obviously recruiting for some copymill paying experienced writers entry-level rates.
How do I get past the clients who are looking for cheap rather than quality work?
Hi Dorothy,
I think this list of Upwork tips (link) should help. The main key, for me, is being extremely discerning about what jobs to apply for – I only go near those where everything looks right: trustworthy looking client, clear job description, realistic budget, not too many other applicants, no jobs where it already looks like they’re interviewing loads of people (they’re gonna be indecisive and hard work!) etc. etc.
In short, I’d say to spend far more time searching than applying. Over time you start to build up a sense for which clients are worth looking at. I don’t personally use Upwork much at all these days, but back when I did, I would typically land 1 in 3-4 of the jobs I applied for by applying the tips in the article linked above.
Best wishes,
Ben
I just logged back on to Upwork after being away for awhile and I got a message that my profile was set to private and to make it public again, I have to pay for a subscription. I am one of those freelancers that had a good rating and had done quite a bit of work so people came to me. How do those people invite you for work now with your profile being forced-set to private?
I’m not sure what you mean. My profile isn’t set to private, it’s public, and I pay for a subscription regardless. The new charges haven’t come into effect yet.
UpWork will shift your profile to private if you have been inactive for some period of time. Their definition of “Inactive” is that “You haven’t earned any income”. It happed to me a few times. I complained in the community forum expaining that I had NOT been INACTIVE. I had been actively searching for and bidding on projects. I hadn’t earned any money because my searches and bidding had not resulted in actually getting any jobs. It was like I had to beat the so called moderators over the head to get them to understand that concept: No work = No income. Seems simple but you’d think it was rocket science. Anyway, eventually I got them to reinstall the “public” status of my profile and I wasn’t required to to upgrade to a paid subscription. That’s a new one on me. Never heard of that before. Maybe it’s a new policy. Another part of their BFD (“Bleed the Freelancers Dry”) routine.
Ah OK, interesting. Mine never flicked onto private despite me not using it for months at a time, but I’ve always paid for a Plus subscription.
What many of us are so ticked off about is that UpWork could simply reduce the number of connects alotted to each freelancer while letting those connects remain FREE. We believe this would achieve the same result as charging for the connects. Why? Because with the free connects being a limited resource the freelancers will use them more wisely than wildly. The decision makers at UpWork must have thought of that. I can’t imagine it didn’t occur to them. But what did they do? They opted for charging for connects. It was a convenient way to bleed more money from us. It conjures up an image of the old time snake oil salesman who sells you a bottle of “medicine” with no actual medicinal value and tells you “Drink it. It’s good for you!” At 15 cents a pop (remember it takes several “pops” just to land one interview and maybe actually land a gig), and millions of freelancers (over 10 million), that must translate into somewhere in the neighborhood of millions of dollars a day that will be going into UpWork’s pockets. Even if it’s not millions a day it must surely be some enormous number beyond my comprehension. In any case, now we will essentially be paying money to gamble on the remote possibility that we might land a gig. Grabbing a whopping 20% of everything most of us are paid isn’t enough? Seriously? What really baffles me (and I’m far from alone on this point) is why UpWork continually insists on biting the hand that feeds it.