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How to Avoid 20% + 2.75% Upwork fees?

Update as on Dec 31, 2016: For this blog post, Upwork permanently terminated my freelancer account and send me a legal notice (“Upwork Demand Letter”) received today. In the legal notice, they stated that this blog post contains some misleading information which defaming Upwork’s reputation. Currently, I’m reviewing their Demand letter and I’m trying understand their claim. After my study done with the legal notice, I have a plan to make the necessary correction within a week or two. Of course, I don’t want to provide any misleading information to my blog audience. 

 

Are you a freelancer on Upwork?

Yes!

Then you must hate to pay 20% Upwork fee from your hard-earned cash, right?

If you find yourself shouting “yes” to these questions then you are probably looking for an Upwork alternative solution to avoid the Upwork’s greedy fee structure.

As with many freelancers, and clients, you are in the same boat, looking for an alternative of Upwork. However, you also want to make sure someone should Guarantee your payment for your Hourly or Fixed price job, right?

Not a freelancer,  but you landed on this article from Google search result? Then I presume, you probably a client on Upwork and you are also worrying about paying a 2.75% extra fees or 25$ monthly membership fee to Upwork. So, looking for a Upwork alternative without compromising the quality of the work you need for your projects, right?

Well, with this article, I’m going to show you how to avoid 20% + 2.75% Upwork fees by using an Upwork alternative platform which is exactly same functional like Upwork. Regardless, you are the client or the freelancer, both of you can save your money.

Let’s have a look what’s new Upwork Payment System, fees and changes:

Upwork recently made changes  in their payment system;  declared by their CEO Stephane Kasriel just a few months ago. Even if they stated it as small change but maybe it is not. Previously they were charging 10% fee on every project on freelancers.

In the new payment system, they made it more complex and controversial. It mainly talks for the high-end freelancers who regularly bills five figure amounts. Let’s take a look at the attributes of the new payment system.

1) For Employers or Clients

  • 2.75% charge have to pay for every transaction.

2) For Freelancers:

  • 20% will be charged for the starting $500 freelancer bills a client.
  • 10% will be applied from the range of $500.01 to $10,000.
  • 5% for the bills more than $10,000.


Upwork sucks

 

Now, if a freelancer work for a project for a total project $600 value, the client has to pay $616.5 where $600 for freelancer + $16.5 Upwork fee. And the freelancer has to pay, 20% for the first $500, which is $100 and 10% for remaining $100 which is $10, thus Upwork keeps 110$ from freelancer plus $16.5 from the client, effectively Upwork keeps 126.5$ and freelancer get $490 for a 600$ project. Which is completely INSANE in my opinion!

 

Then tell you what, really? That doesn’t make sense because by calculation the effective rate is approximately 25%! In this case, 78% of the freelancers are who bills ranging from $100 to $1000.

So ultimately the Service fees chart looks like:

  • Before, 21 June 2016

  • CLIENTS PAY
    Zero Percent.
  • FREELANCER PAYS
    10% service fees

  • Now, From 21 June 2016

  • CLIENTS PAY
    Processing fee 2.75%/per transaction or 25$ monthly fee.
  • FREELANCER PAYS
    According to the amount of transaction it’s 20% / 10% / 5%.

A brief history of Elance-oDesk merged and fees changes

In 2013, two big players in online marketplace oDesk and Elance declared a merger and started their operation in separate platforms. They said publicly that it will bring unprecedented freedom for those looking to  find work online. A year later, a new company was announced with the name Upwork Global Inc and attributed the best innovations of both oDesk and Elance with the promise of many.

A year later, a new company was announced with the name Upwork Global Inc and attributed the best innovations of both oDesk and Elance with the promise of many new features. But according to the marketers this is merely a relaunch. There, oDesk is disappeared and formed with the name Upwork.

The new features Upwork already offers in this platform is a new group collaboration fracture fee anybody an use. Matching algoridom that improves the site’s ability to make connections. At the beginning, Upwork charge 10% on each billing as same percentage as oDesk charged previously. Until the new payment method came effective from 21 Jun 2016.

The new features Upwork already offers in this platform is a new group collaboration fracture fee anybody an use. Matching algoridom that improves the site’s ability to make connections. At the beginning, Upwork charge 10% on each billing as same percentage as oDesk charged previously. Until the new payment method came effective from 21 Jun 2016.

When you stop and talk to fellow freelancers they agree that this new system, is not a well liked system, and when the issue was addressed with those at Upwork they claimed that their new policies and fees had been put in place to help the freelancer. This is supposed to help them in the long run. Unfortunately

Unfortunately, their math is a little skewed. It’s not understandable why clients should pay constant amount of money for the transactions they made. According to the CEO of the company it will help them in a long run to get more bill payment if they can make it to $500.01 to $10,000 which is likely to be real hard for most of the freelancers.

Because 80% of the freelancers are working as a part-timer and their transaction is quite small. For a $100 logo why a graphic designer should pay $20 to the company? Do not seem legitimate. According to the statistics 78% of the freelances get payment less than $500. So maybe its time they go back to the drawing board?

 

Now let me introduce you an Awesome platform PeoplePerHour?

As it seems it’s time to think about alternatives. There are a number of competitors you can find in the market as an alternative of the Upwork. Such as Freelancer, Guru, PeoplePerHour, Fiverr and much more. But when it comes to the efficiency and advantage at the work, I personally like to working in PeoplePerHour (PPH).

PPH is NOT only a marketplace BUT also a community of curated freelance talent which can be compared as Upwork private talent cloud.

It allows you to work with buyers around the world and find the job and be able to structure everything on an  hourly or Fixed price basis. PeoplePerHour always offers the satisfaction guarantee and you do not have to pay any service charge whatsoever whereas with, Upwork is charging 20% these days. Apart from the service fee, Freelancers also get to use Escrow and invoicing system for free.

Same as freelancers, the buyers also get the benefit of 0% service fee forever. Where Upwork is charging 2.75% each time or 25$ monthly fee in their new payment plan. As a buyer, you can get the service as Upwork. You can get freelancers on hourly and fixed price model and in renewable approach.

Like other marketers, PPH gives you the advantage of contacting with the freelancers directly or choosing them by seeing their profile, portfolio or by their reputations. By sorting out based on price, experience, and reputation, clients can get to choose their required skill holder very easily.

As with other marketers, PPH gives the clients to manage the project in their own hand. They can share contents, documents, can make payments without leaving the platform. And the satisfaction guarantees. You will not pay unless you are 100% satisfied. They will not waste your time by giving false service. There is always fair chance to find good freelancer along with a good team.

PPH means happiness

A comparison table with PeoplePerHour, Upwork and Freelancer features and fees structures differences.

After the merger between oDesk and Elance, Upwork became the leader of the online marketing and freelancing industry. But in recent years PeoplePerHour and Freelancers’ are now doing really good comparing to the Upwork.

So let’s see some of the ingredients that show that PeoplePerHour is the best online marketplace out there.

  • PLATFORM
    PeoplePerHour

  • ORIGIN
    Founded in 2007, Head office London, UK
  • NUMBER OF CONTRACTORS
    Approximately 3 Million
  • NUMBER OF JOB POSTED
    Approximately 3.1 Million
  • MEMBERSHIP FREES
    For Employer: Free
    For Frelancer: Free
  • SERVICE FREES
    For Employer: 3.5%
    For Freelancer:
    1) 15% for any income over $280
    2) 2) 0% service fee package for the invitation of new clients.
  • WITHDRAWAL FREE
    PayPal -1.9%
    Payoneer – $3/withdrawal
    US bank transfer – Free
    Reference – Here
  • OTHER FEES
    Subscription fee: $0 per month Posting Fee: $0
  • PAYMENT FEATURES
    Hourly (Escrow Service and Refund Available.)
  • WORK ABILITY
    Chances of finding good team: High
    Chances of finding good seller: High
  • SERVICE OFFERED
    1. Web Development.
    2. Software Development.
    3. Network and Information Technology.
    4. Writing and Translation.
    5. Administrative Support.
    6. Design and Multimedia.
    7. Business Service.
    9. Sales and Marketing.
  • SIZE
    Ideal for small and medium sized business.
  • CONTRACT MANAGEMENT FEATURES
    1. Maximum Hourly Restriction.
    2. Hourly work features.
    3. Payment History Features.
    4. Detailed Time Analysis.
  • CHARGING FEES
    PPH offer satisfaction guarantee. So, if buyers are satisfied with the work then they will pay.
  • SEARCHING FOR POTENTIAL EMPLOYEES
    Buyers can select the freelancers by their choice whom they think will fit for the job. There have advantage of direct contact.
  • AFFILIATE PROGRAM
    Yes

  • PLATFORM
    Upwork

  • ORIGIN
    Founded in in 2005, Redwood City, CA, USA
  • NUMBER OF CONTRACTORS
    Approximately 3.5 Million
  • NUMBER OF JOB POSTED
    Approximately 5 Million
  • MEMBERSHIP FEES
    For Employer: Basic plan Free, Upwork Enterprise plan: 25$ per month
    For Freelancer: Basic plan Free, Plus plan: 25$ per month
  • SERVICE FEES
    For Employer: 2.75% for each transaction.
    For Freelancer:
    1. 20% will be charged for $500 bills
    2. 10% will be applied for $500.01 to $10,000 bills.
    3. 5% for the bills more than $10,000.
  • WITHDRAWAL FEES
    PayPal - $1/withdrawal
    Payoneer – 2$/withdrawal
    Local Bank Transfer -4.99$/withdrawal
    (Bangladesh (BDT), Pakistan (PKR))
    Reference – Here
  • OTHER FEES
    Subscription fee: $0 per month Posting Fee: $0
  • PAYMENT FEATURES
    Fixed Price Hourly (Escrow service and Refund available).
  • WORK ABILITY
    Chances of finding good team: Medium
    Chances of finding good seller: Medium
  • SERVICE OFFERED
    1. Web Development.
    2. Software Development.
    3. Network and Information Technology.
    4. Writing and Translation.
    5. Administrative Support.
    6. Design and Multimedia.
    7. Customer Service.
    8. Sales and Marketing.
    9. Business Service.
  • SIZE
    Ideal for big business. For big business that make transaction more than $10,000 gets 5% service fee.
  • CONTRACT MANAGEMENT FEATURES
    1. Maximum Hours Restriction.
    2. Bonus Payment.
    3. Hourly Work Diary.
    4. Detailed time analysis.
    5. Contributors maintain frequent communications.
  • CHARGING FEES
    They have to pay with additional 2.75% service fee no matter what.
  • SEARCHING FOR POTENTIAL EMPLOYEES
    After Buyers submit job description, freelancers submit their cover letters with a proposal to get attention from the buyers. Same method as PPH.
  • AFFILIATE PROGRAM
    No

  • PLATFORM
    Freelancer

  • ORIGIN
    Founded in 2009, Sydney, Australia.
  • NUMBER OF CONTRACTORS
    Approximately 9 Million
  • NUMBER OF JOB POSTED
    Approximately 5.5 Million
  • MEMBERSHIP FEES
    For Employer:
    Basic plan is free
    Paid plan:
    Intro: $0.99per month
    Basic: $4.95per month
    Plus: $9.95per month
    Professional: Free (1-month Trial.)
    Premier: $59.95per month

    For Freelancer:
    Same as employer’s plan.
    Also have other features for additional charges:
    Featured– $29
    Urgent– $9
    Private– $19
    Full Time– $199
  • SERVICE FEES
    For Employer: For fixed projects, a fee of 3% or $3USD whichever is greater. For hourly projects its 3%.
    For Freelancer: The fee for fixed price projects is 10% or $5 USD, whichever is greater and 10% for hourly projects.
  • WITHDRAWAL FEES
    Express Withdrawal– Free
    Paypal– Free
    Skrill– Free
    Payoneer Debit Card– Free
    International Wire– $25
    Reference – Here
  • OTHER FEES
    Subscription fee: $0 per month Posting Fee: $0
  • PAYMENT FEATURES
    Fixed Price Hourly (Escrow Service and Refund available).
  • WORK ABILITY
    Chances of finding good team: Fair
    Chances of finding good Seller: Fair
  • SERVICE OFFERED
    1. Web Development.
    2. Software Development.
    3. Network and Information Technology.
    4. Writing and Translation.
    5. Administrative Support.
    6. Design and Multimedia.
  • SIZE
    Very effective for the premium members who pays $199 per month.
  • CONTRACT MANAGEMENT FEATURES
    1. Maximum Hours Restriction.
    2. Hourly work diary.
    3. Payment History.
  • CHARGING FEES
    Clients will be charged fees only when they are satisfied with freelancer’s work.
  • SEARCHING FOR POTENTIAL EMPLOYEES
    Buyers post job description and freelancers bid for the job. Whoever win the bid is most likely to get the job.
  • AFFILIATE PROGRAM
    Yes

 

Why You Should Join People Per Hour?

Well, you already might be thinking to bring your Upwork long term client (already passed 24m with him on Upwork) or you may have an old Elance client to bring on PPH platform in order to enjoy 0% service fee for Lifetime. Before you move let’s see what is the benefit for sellers and buyers on PPH:

The Seller Benefits:

  • Allows seller to use freelancer tools that keep them safe and protected.
  • Easy to use invoice system.
  • Escrow Facilities and money protection.
  • Customer support in case of conflict.

The Buyer Benefits:

  • Automated invoice system.
  • Detailed tax statement records.
  • 0% service and membership charge.
  • The easy way to use Escrow and WorkStreams Facility with PPH guarantee.

PPH launches some new features that will help ANYONE to take benefit from freelancing and it’s so easy to absorb. Most importantly, freelancers can conduct their operation with clients outside of PPH through their market without any service charge.

How to bring a client to PeoplePerHour?

You need to follow the two steps process to bring your client to PPH.

Step 1 – You need to join first at PeoplePerHour as a freelancer and complete your profile. Creating profile on PPH is very easy and fun. You can do it within 5 minutes by copying your other marketplace profile.

I know some guys are struggling to create freelancer profile on Upwork but trust me – Creating your profile on PPH will take only a few minutes.

Step 2  – Invite your client join at PPH under zero service fee promotional offer. Once you client join on PPH, you both will enjoy 0% service fee for LIFETIME! You just need to know your client email address and full name to send him an invitation to join PPH.

Here is the screenshot of the client invitation form below.

People-Per-hour--zero-Service-Fee-Invation-link2

In the “Personal Message” field of the invitation form, you need to write everything clearly and to the point. Don’t mess it with unnecessary blaming of other marketplace charges – Clearly specify the advantages you both will receive on PPH.

For your advantage, here I’m presenting a couple of “Personal Message” which I sent to my client and both joined me on PPH.

Dear [Name of Client],
Elance is literally shut down from 30th May 2016 and I am unable to send you an invoice for XXXX project through Elance anymore. I hate to invite you to join on Upwork as their greedy grab fee – 20% from freelancer + 2.5% for client.
However, I got an Upwork alternative which is Awesome and it’s called People Per Hour (PPH). PPH is An UK based freelance Marketplace operating business from 2013. PPH will not charge you/me anything for the Lifetime if you just join there with my referral link. I will send you the details how you can join there on the following email. Once we set up a new contract on PPH, I’ll be able to send you all the invoice for the current projects.

Let me know if you have any questions.

Best Regards
Muhammad

Dear Matthew,

I hate to pay 20% from my hardcore earnings and I know you are also paying 2.5% every time whenever you make a payment, that sucks a lot!

The reason why I am writing you this email? Yes, I got an Upwork alternative and it’s called people per hour (PPH) – An UK based freelance Marketplace. PPH will NEVER charge you/me anything for the Lifetime if you just join there with my referral link. I will send you the details how you can join there on the following email. Once we set up a new contract on PPH, I’ll be able to send you the invoice for the ongoing projects.

Let me know if you have any questions.

Best Regards
Muhammad

As a freelancer, your job is not done just after sending an invitation to your client. You need to follow up with him and make sure your client complete the following steps so that you both eligible to enjoy zero service fee for Lifetime:

  • Tell your client to complete his registration by following your invitation link. An invitation link should receive to his email inbox if you send him invitation using the link. Your invitation link is the only identity to qualify the promotional offer.
  • Tell him to post a job on PPH and invite you to apply. This is very common like any other marketplace. I usually provide my profile link so that client can easily send me an invitation after posting the job.
  • Promptly respond to his invitation and tell him to accept your proposal.
  • Once your client accepts your proposal, you both all set to enjoy zero service fee for lifetime. Don’t bother fixed price or hourly contact as PPH allows you to send an invoice to the client on both from (fixed/hourly) under the same contract.

How much can you save if you bring your existing client to PPH?

Recently I invited a client to PPH who was my long term client on Elance. I’m receiving 240$ each week from him. That means I’m saving almost 50$ per week from one client if compared with Upwork 20% fee!

Now, For the sake of calculation, Let’s assume a situation where you are receiving a payment 8k$ from a client through Upwork. If this payment lies in between 5k$ to 10k$ slab (very much possible, if you are running an agency).

Then how much you need to pay Upwork fee? It’s 10% of 8k is 800$. Who wan’t to loose 800$, when you can save it for free if you use PPH.

 

Your Turn: There should not be any Logic of paying 100$ as a fee for a total 500$ project. Also, Upwork charges another 2.75% processing fee from your client when a client pays you.

Who wan’t to pay 20% + 2.75% when you can do it free? No one, right?

So, it’s your turn now – Just go one step further and Click Here to Join PPH right awayinvite your clients under zero service fee promotional offer and start enjoying 0% fee for Lifetime.

After study Upwork Demand Letter today, I must clarify that, As per Upwork user agreement, you must use their platform and process all the payment with a client at least for 24 months which they call “Non-Circumvention Period”. Meaning, you can’t leave or a client can’t leave Upwork before 24 months if you do so, you have to pay compensation as per their policy. 

 

Bonus: Recently, we opened a “PPH Bangladesh | পিপল পার আওয়ার বাংলাদেশ” Facebook Group, where we will help each other and build a strong PPH community. I cordially invite you to join the group. International PPHer’s are also welcome to the group.

 

Pro Tips: “Bring your existing long term clients to PPH and enjoy 0% charge for Lifetime – both you and your clients” this is the essence of my full writing. No other marketplace in the earth is offering you this same advantages at this moment.Here are few pro tips to take the advantages:

  • Invite your old Elance client to join PPH by describing 0% fee for Lifetime. You can use the email template I showed above. Most of the client will be happy to take this advantages.
  • Invite your long-term Upwork or Freelancer clients to join PPH if you have a great relationship with him. If you don’t have a good relationship right now, don’t worry, take your time to build a strong relationship. Any client will agree not to pay 20% when you both can do it for free.
  • During the new job interview, you will find some client is offering to pay you directly instead of marketplaces due to their high service fees. So, you can take the advantages of this situation and ask them to pay you via PPH for free of charge. To take this advantage in the future,  you should have a complete PPH profile today.
  • You can join different groups on facebook and LinkedIn, participate in the conversation people asking for help, create a brand image. Once you create your brand profile in groups – you can offer them a paid service and receive the payment through PPH. My 20% income coming from this way.

If you have any comments or questions feel free to leave them below.  Thanks!

 

Frequently Asked Questions and Answers:

You have 100% right to bring your long term Upwork or your old Elance client to PPH. As you NEVER signed off any agreement to work with a client on Upwork for your lifetime. However, After study Upwork user policy, I found there is a clause like you have to work and process all payment using Upwork platforms for at least for 24 months if you found that client on Upwork.
It seems they, intentionally, implied this section in order to maintain monopoly business.  In the SAAS business, people randomly switching platforms if they get a better offer. So, it’s up to you what you want to do.
Well, I’m in the freelancing industry from 2012 and I have used all major platforms as both freelancer and client, so I know the Ins and Out of the industry. While freelancer.com could be an alternative option of Upwork but PPH is the best. I have added a comparison table above which obviously justify my recommendation.
I recommend not to use Upwork messaging system while inviting your client to PPH. If you use Upwork message system, then there is a strong chance of banning your profile by the name of abusing their system, so Don’t use Upwork messaging system. Nevertheless, it’s your moral obligation to contact with a client outside of Upwork.
PPH is 100% safe and secure exactly like Upwork – for both freelancer and client. As like Upwork and other major platforms, PPH offers both hourly protection and Escrow system so you will enjoy more trust and confidence compared with Upwork once you feminize with the system yourself within a week or so.
Yes, you can get more client on PPH. Additionally, you can offer your Hour-lies (which is called gig on Fiverr). So it’s a combination of Fiverr and Upwork and they will charge you 15% for the client you are being hired on PPH, yet better deal than Upwork, right?

Well, to be honest, I just hate Upwork’s interface, features, and functionalities – they are simply awful.

Secondly, I was in love with Elance, my elance profile was awesome and I was able to earn 5-8k/month from elance. Upwork’s greedy business plan just killed my Elance career and reputation without any compensation. Today, when I am updating this post, It’s clearly proved that, Elance-oDesk merger and taking new name Upwork is nothing but an execution of this greedy fee structure.

Thirdly, I have used an affiliate link to join on PPH, so if you join PPH by following my PPH referral link then I’ll get a referral commission and you will get a 5% discount voucher– it’s a win-win! Sounds a great deal, right?

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PREVIOUS DISCUSSION

  • Peopleperhour is a great platform. I already get benefit from it in a unique way.
    Btw, very nice & informative article.

    1. Thank you so much for your comment Easir.

      I do completely agree with you -Peopleperhour is a great platform. That’s the only key inspired me to write a long article so that the freelancer community can get the benefit from it.

  • People Per Hour is the absolute worst marketplace I have ever encountered. Sellers are completely unaccountable for non delivery or late deliveries. It is difficult to leave feedback and disputing a charge or even inquiring through Paypal about status will get your account automatically suspended.

    Placed three orders totaling $1200. All had 5 day deliveries. None of the sellers provided any updates or delivered what was agreed. Eventually all three was refunded. PPH deducted a cancellation fee despite their policy to only charge for buyer intitiated cancellation.

    One seller made numerous threats against me for not accepting a substitute which i didnt want or agree to. He threatened to call my clients and all publishers that I have a relationship with. PPH has refused to respond about the threats and harassment made through their system despite numerous emails.

    I have been using upwork (elance and odesk) for 15 years and fiverr for a long time. Never had issues and customer service is fantastic on the other marketplaces.

    The other marketplaces are extremely reasonable and customer firendly.

  • Been using Elance (now upwork) for 15 years. Been using Fiverr for a couple of years as well. Never had an issue. Spent $1200 on People Per Hour and really came to appreciate the other market places. Many of the Hourlies are outright fraudulent. Two of my orders were cancelled by the seller. PPH charged me a refund fee despite their official policy not to charge if seller is unable to deliver.Third order I received a substitute that was significantly inferior and i didnt want or need. Seller made numerous threats against me online via PPH message board. PPH refused to deal with the seller despite his threats and the fact that he is advertising services he cant fulfill. PPH makes a lot of their money off the refund fees from sellers who cancel.

    1. Thank you so much for your comments, Jacob!
      I’m so sorry, something unusual happens to you on PPH. But, so far I am 100 times happier using PPH if compared with Upwork.

      I was absolutely loved with Elance but when they merged and built Upwork.. they totally suck.

      No one can find justify Upwork service fee structure. Also, I do have exactly your opposite experience about their customer support. They got a pool of cheap customer support team from India and Philippines.

  • Thanks for your awesome post 🙂 I have done work near about 4000 hours on odesk. They were really good 🙂 I didn’t get any support from upwork after converting from odesk. but they don’t care about freelancers. they only care about buyers. I have nothing to say about upwork 🙂 I just want to say “FUCK YOU UPWORK”

  • Hi Muhammad
    I like your article and the amount of hard work you have put in is visible, but out of curiosity I wanted to ask, how much did PPH paid you or any deal to promote PPH so heavily in your post

    1. Great question Feroz!

      To be honest with you, I have no deal with PPH or any other party. I’m entirely unhappy with oDesk-Elance merged issue because it damaged my Elance career from where I was able to earn 5k-8k per month. Furthermore, I just hate Upwork current greedy fee structure.

      Today, when I am answering your question, I got news that my access to Upwork is permanently suspended only for this blog post. Please be noted, even I don’t like Upwork yet, I was a top rated freelancer, 100% job success rate and monthly earning was around 1000$ per month.

      I wrote what I believe AND with good faith to help freelancer community. I am not going compromise and will NEVER delete this post. Hope you got the answer.