If you are a freelancer interested in getting hired on Upwork, such as a virtual assistant, a freelance writer, a graphic designer, a web developer or any other type of person who provides a service that’s in demand on the world’s biggest job board, there are two things you should know about how Upwork operates to figure out what is right for you.


Two Types of Payment Arrangements on Upwork

Upwork provides two ways that clients can pay you. In a fixed priced project, the client is responsible for funding the amount of the agreed-upon job in escrow. Upon completion of the job, the funds are released to you by Upwork.

In this way, Upwork serves as a third party and gives you the peace of mind that the client is serious about paying you. They do have to pay upfront but the funds are held by Upwork until you successfully complete the job.

As a freelancer, this can make a world of difference particularly when you are new. Chasing down money is frustrating and can lead to administrative headaches, so any situation where you can minimize your payment problems such as using the fixed priced payment protection on Upwork is in your best interests.


When to Choose Fixed Price

Fixed priced jobs are the right fit for those situations where you and the client have a clear outcome. For example, if you have agreed to produce a logo for the client, you might accept a fixed priced job on Upwork to receive the exact amount divided in two, for payment upon completion of the first draft and then the second payment being released at the conclusion or being paid all of the funds at the conclusion of the job.

Fixed priced jobs are often preferred by clients because they know exactly what they are getting as well as what they are paying. However, there are some cases where fixed priced jobs just do not work out. It can be difficult to tell how long a particular project is going to take.

An hourly job might be more appropriate. Many people are more comfortable paying hourly, since the client and the freelancer may not be able to come to terms about a meaningful fixed priced final number. Virtual assistants often work hourly but many other types of freelancers can as well. Editors often work hourly because the amount of time they will need to spend editing a piece depends on who wrote it and the amount of work required to fix it. You may end up taking both fixed priced and hourly paid jobs. There is something you should know about how hourly jobs on Upwork function.

You only receive Upwork’s payment protection when you use their work tracker. The work tracker is a system that captures screenshots of your computer as you are working to ensure that you were active and working on the job during the time you said you were. Some clients will allow you to log your hours manually, meaning that you do not have to use the Upwork tracker.

However, when you don’t use the tracker, if the client files a dispute over your timesheet, you have no protection as the freelancer and there is a strong chance that the client will get a complete refund of their money.

Even when you use the tracker, the client can exclude particular portions of the payment terms if it is clear that a screenshot was taken while you were on Facebook, for example. Sadly, as the client on Upwork, I have even had this experience where people tried to use the work tracker, which captures both screenshots as well as how much the person was using the mouse or the keyboard at the time. In the situations I am referencing, the freelancer was doing personal tasks and wrapping up time that I was paying for.

The client has the opportunity to go in and delete this time and may choose to end your relationship because of dishonesty. Hourly payments also take a longer time to get paid. Depending on when the clients have funded the milestones and in a fixed priced job, you can expect to receive a payment for that milestone within 3 to 7 days after you have completed.

However, because of the weekly schedule that Upwork uses for hourly jobs, your timesheet gets submitted on Sunday night and does not get paid to you directly in terms of withdrawing the funds until one week from that Wednesday; so 10 days later.  This is because the client has the opportunity to review your timesheets and to file any disputes.

While the funds will be sitting there in your account and showing as pending, they are not actually released to you until that 10-day period. If you need to get paid quickly, Upwork fixed priced jobs may be more appropriate but they can still take several days for actual release to you. Whether or not a fixed priced job or an hourly job is appropriate for your new position on Upwork has to do with a number of things with the job itself. If you are not sure how long it is going to take or if you cannot provide a clear quote for a fixed priced job, going the route of working hourly may be a good option in the short term.

If you and the client then have a better understanding of what is involved in the project you may switch to fixed price milestones. Most clients enjoy working on an hourly basis when they don’t have time to log in and update milestones constantly. Hourly means the funds are just taken out of their account every Monday and they have a week to review your timesheets. This can be less work for an overburdened client. In terms of deciding whether you want to work hourly or on a fixed priced basis, consider both your needs and client’s needs on Upwork.

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