Freelancers with verified profiles on Upwork will have seen a key notification displayed on their dashboard. On May 1, 2025, Upwork will implement changes to its freelancer fee structure. Earlier Upwork implemented a standard 10% fee on all contracts for freelancers who obtained work through platform proposals or invitations. That fee remained the same for both fixed-price jobs and hourly contracts until most recently after Upwork started sending out the notification that looked like below.
Why the Change?
With its 10% service charge Upwork offered freelancers a lower fee compared to platforms like Fiverr or PeoplePerHour which made it a more appealing option. We have explained the reasoning for this flat fee and detailed how Upwork managed to provide it in a prior blog post. The introduction of the new notification has led to extensive bewilderment amongst users. This article provides complete details about the change to enable you to manage your online earnings confidently.
Key Changes to the Fee Structure
The new structure eliminates the fixed 10% fee for all contracts. The fee calculation will now depend on multiple elements with supply and demand dynamics holding primary influence within the marketplace.
- The available work volume in the marketplace
- Freelancers must vie with one another to secure available work.
- The number of clients seeking services
The fee structure for micro website projects used to charge a 10% fee on work priced between $600 and $800. The same 10% fee applied to more complex projects including website development or video editing which cost $2,000 or more. Upwork will now be using a refined fee calculation method that considers market conditions to address this disparity.
Understanding the New Fee Calculation
It’s important to note that the service fee will not solely depend on the total project amount. Other factors will also come into play, such as:
- The number of freelancers with specific skill sets available for a job
- The demand for those skill sets in the marketplace
Minimum and Maximum Service Fees Explained
Upwork has made it clear that service charges will not exceed 15% for any freelance category. As mentioned earlier, these fees will no longer be fixed but will fluctuate based on supply and demand.
Impact on Existing Contracts
A common question arises: If a freelancer is already working on a contract with a client, will their fee structure automatically change after May 1, 2025? The answer is straightforward: existing contracts initiated before May 25 will continue to be charged under the old rules, meaning they will maintain the 10% fee.
Why the Change in Fee Structure?
Upwork has stated that they continuously monitor market demand and supply, along with pricing for provided services. They believe that it’s crucial to create a fair environment where a uniform fee structure doesn’t apply to all freelancers. This change aims to encourage more freelancers to explore diverse skill sets and opportunities.
Will Fees Change After May 25?
No, Upwork has explicitly stated that if your contract begins after May 25, and you are informed of a fixed fee, that fee will remain unchanged for the duration of the contract. For example, if your contract has a 7% fee implemented, it will not change for as long as that contract remains active.
Factors Influencing Fee Structure
Upwork has provided limited information on the specific factors that will affect fee calculations. However, they have emphasized that the job category, its scope, difficulties, and the urgency of completion will all play a critical role, along with market demand and supply.
Are Freelancers Plus Members Exempt from This Fee Structure?
No, Upwork will charge the same fee structure across all freelancers, regardless of whether they are on the Freelancer Plus or a basic package. If you were previously charged a 0% fee for direct contracts under the Freelancer Plus package, that will remain unchanged for contracts initiated on or after May 25.
Are Agency Accounts Exempt from This Change?
No, agency accounts on Upwork will also have to adhere to the new fee structure based on the algorithms established after May 25.
Is there a Possibility of Discounts to Avoid This Fee Structure?
Currently, Upwork has not announced any discounts or offers to circumvent this fee structure, and no information regarding such offers is available for the upcoming days.
Where Can You Find More Information About the Current Freelancing Fee Structure?
If you need more information regarding Upwork’s freelancer service fee structure, feel free to click on this link.
If you have any confusion or questions about the information provided, don’t hesitate to reach out to us. We are happy to assist you! If you are new to Upwork and want to learn how to optimize your profile, be sure to visit our Upwork profile optimization section.
