How does upwork payment work

Upwork's payment system is designed to provide security and efficiency for both freelancers and clients. It acts as an escrow service, holding client funds until the work is completed and approved, then releasing them to the freelancer. This process differs slightly depending on whether the contract is hourly or fixed-price.

How Freelancers Get Paid

For Hourly Contracts

Time Tracking: Freelancers must use the Upwork Desktop App to track their time. This application records hours and takes random screenshots of the freelancer's screen to build a "Work Diary."

Weekly Billing Cycle: The billing period runs from Monday to Sunday (UTC).

Automatic Invoicing: On the following Monday, Upwork automatically generates an invoice for all hours logged and bills the client.

Client Review Period: Clients have until Friday to review the hours and dispute any they find inaccurate.

Payment Security Period: Once the client's payment is successfully processed, the funds are subject to a 10-day security hold. This period allows for payment processing and dispute resolution.

Funds Availability: After the security hold, the funds become available for the freelancer to withdraw, typically on the following Wednesday. Note: Top-rated freelancers on Upwork may be eligible for "Faster Payouts," which reduces the security hold to five days.

For Fixed-Price Contracts

Escrow Funding: Before a freelancer begins work on a milestone, the client must deposit the agreed-upon payment into an escrow account. This provides payment protection for the freelancer.

Work Submission: Once the milestone is completed, the freelancer submits the work to the client for review.

Client Approval: The client has a 14-day review period to approve the work or request changes.

Payment Release: When the client approves the work, or if they take no action within the 14 day period, the funds are released from escrow to the freelancer's account.

Security Hold: The released funds are then subject to a five-day security hold before they become available for withdrawal.

Freelancer Withdrawal Methods and Fees

Once funds are available, freelancers can withdraw them using several methods, each with different fees and processing times:

Direct to U.S. Bank (ACH): Free, typically takes 2-5 business days.

Direct to Local Bank (outside the U.S.): $0.99 USD per transfer, can take up to 4 business days.

U.S. Dollar Wire Transfer: $50.00 USD per transfer, typically takes 5-7 business days. This is generally for larger transfers due to the high fee.

Instant Pay (for U.S. freelancers): $2.00 USD per transfer, funds arrive within minutes to a linked debit card.

Third-Party Services: Includes PayPal ($2.00 USD per withdrawal plus PayPal's fees) and Payoneer ($2.00 USD per withdrawal plus Payoneer's fees).

How Clients Pay

Upwork provides a secure and straightforward system for clients to pay their freelancers.

1. Billing Methods

Clients must add a verified billing method to their account before they can hire freelancers. Accepted methods include:

Credit and debit cards (Visa, Mastercard, American Express)

PayPal

Venmo

Bank account (ACH) for eligible U.S.-based clients

2. The Payment Process

Hourly Contracts: Upwork automatically bills the client's primary billing method each week based on the hours the freelancer has logged in the Work Diary.

Fixed-Price Contracts: The client must manually fund each project milestone upfront. The funds are held in escrow until the freelancer completes and the client approves the work.

Service Fees

Both freelancers and clients may be subject to Upwork's service fees.

Freelancer Service Fee: Upwork charges a service fee on a freelancer's earnings. Since May 2025, this fee has been a variable percentage, ranging from 0% to 15%, depending on the contract. The exact fee is displayed to the freelancer before they accept a contract.

Client Fees: Clients also pay a service fee on their payments, which can vary based on their plan (e.g., Marketplace, Business Plus, or Enterprise). This fee is charged on top of the freelancer's rate.