Maximize your freelance earnings: from the client’s payment to your bank account

Every time a client pays for your work, they could be also paying a small fee (around 3 to 5% of the contracted amount) to the platform (see how Upwork and Freelancer.com charge their clients) . It’s important that you know this to keep it in mind in the negotiation with the clients, since they’ll have an additional cost that you don’t usually see.Then, it’s key to understand the fees that your freelancing platform charges you for getting hired through them.

For example, Upwork announced a change on their fees for freelancers in March 2023, moving from the previous variable scheme to a flat 10% for all transactions, including contracts with Enterprise Clients (see full details here).

On the other hand, Freelancer.com charges depending on the type of project. The fee for fixed price projects is 10% or U$5.00, whichever is greater, and 10% for hourly projects. People per Hour charges a service fee on earnings, 20% fee for billings below £250 per client, 7.5% fees from £250 and £5000, and only 3.5% fees on billings over £5000 per client.

As you can see, different platforms may have different fee structures, so it’s important to explore the options and understand what you’re signing up for even before you sign your first contract with a client.

Some banks charge account holders for receiving deposits into their accounts. Before deciding how to move money to your bank, make sure you have clarity about the fees involved. For example, depending on the bank, there is a fee between U$5.65 to U$25 to receive international transfers in bank accounts in El Salvador reason why many freelancers prefer to use other services like Paypal, Payoneer, or Wise to get their money moved to their accounts and then spend directly from the debit cards associated to those platforms. Those services are not free, but the costs could be lower. Paypal charges a fee of 3.49% + U$0.49 per transaction, while Payoneer charges a U$3 fee for each transaction from the freelance platform. The cost to withdraw money from online payment services to your local bank depends on your local currency and country.

An alternative is the use of e-wallets and crypto. Crypto payments are processed through decentralized networks and have the potential to reduce transaction fees and processing times. You can receive payments in cryptocurrency and then convert them to your preferred fiat currency or use it directly for purchases online. Popular cryptocurrencies for freelancers include Bitcoin, Ethereum, and Litecoin. However, the option to get paid in cryptocurrency is not available on most of freelance platforms. Electronic wallet services or e-wallets, allows users to store, send, and receive money using their mobile phone, as a popular alternative to bank accounts. Platforms may accept some local e-wallets depending on the country of the freelancer. For example, Upwork accepts M-pesa to Kenyans and Freelancer.com accept e-wallets such as Alipay (China), Giropay (Germany), and WebMoney (Russia).