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Upwork changes pricing format

May 04, 2016

Online staffing provider Upwork is changing its freelancer pricing format from a flat fee to a sliding scale and will begin charging clients a processing fee.

“Our one-size-fits-all pricing doesn’t serve our community well; each one of you takes a different approach to the way you work,” CEO Stephane Kasriel wrote Tuesday in a blog post. “We have thoughtfully considered what pricing model will best enable us to make Upwork an even better place for you to get work done.”

Freelancers currently pay a 10% fee for all Upwork contracts and clients pay no fees. But starting in June, freelancers will pay a sliding service fee that’s designed to reward large, repeat relationships. And clients will pay a payment processing fee, either per transaction or a flat monthly fee.

“We’ve talked to many of you and feel confident that this is the best path forward for the community and for us to help create a better future for freelancing online,” Kasriel wrote.

For freelancers, Upwork will charge a sliding fee based on a freelancer’s lifetime billings with each client across all hourly and fixed-price contracts. The freelancer will pay 20% for the first $500 billed to a client across all contracts with that client; 10% for total billings with a client between $500.01 and $10,000; and 5% for total billings with a client that exceed $10,000.

Clients will pay a new fee of 2.75% that passes on a portion of the payment processing costs currently subsidized by Upwork. This will allow continued investment in payment processing that helps freelancers get paid much easier than they would off-platform, according to the company.

Clients in the US, Canada, Australia, the UK and certain Eurozone countries may be eligible to pay a monthly flat fee of $25 instead of 2.75% per payment — an alternative for those that spend more than $910 a month.

“We help you build your business by acquiring clients, helping you connect with the right opportunities, and providing services like payment protection,” Kasriel wrote. “On small projects, the costs we incur outweigh the fees charged; because they aren’t profitable, we haven’t been investing in growing the number of these projects. At the same time, client relationships that result in larger, repeat projects incur fewer of these costs because of the trust that’s been developed, and we want to pass those cost savings back to our users.”