Upwork to Raise Client Marketplace Fees Starting October 3

The freelance platform Upwork announced this week that it will be implementing a change to client marketplace fees starting October 3. This new fee structure will apply to all payments made by clients to freelancers across a variety of contract types.

Payment Types Impacted

When clients hire on Upwork, they pay a Client Marketplace Fee on all payments made to freelancers. In addition to the marketplace fee, clients are also charged a one-time Contract Initiation Fee for each new Marketplace and Project Catalog contract.

Traditionally, the Client Marketplace Fee was capped at 5% of the client’s payment. However, starting October 3, the fee cap will be increased to 7.99% and will apply to all “new and existing” contracts created on or after the effective date.

This fee increase will impact several categories of payments, including:

• Fixed-price and hourly contracts
• Project Catalog projects
• Bonuses
• Bring Your Own (BYO) contracts
• Direct contracts
• Consultations
• Payroll
• Expenses
• Miscellaneous charges

How This Change Impacts Freelancers

It is important to clarify that this change will not impact freelancer fees. Freelancers will continue to pay the same flat 10% service fee on all earnings, as has been the case for several months.

In fact, this change is likely to be positive for both Upwork and freelancers, as it allows the company to increase its revenue without taking additional funds from freelancer paychecks. The impact on clients, who have traditionally paid fewer fees to use the platform (previously charged only 5% on payments), is expected to be minimal. In contrast, freelancers have long faced fees between 10-20%, as well as additional costs associated with sending proposals through Upwork’s Connects system.

What do you think of this change? Let us know in the comments below.