Caleb Ulku argues that Upwork's freelancer fees are worth paying and should be reframed as a marketing and referral cost rather than a penalty. He breaks down the fee structure: 20% on the first $500 earned with a client, dropping to 10% thereafter, and points out that since Upwork handles credit card processing, the effective fee is closer to 6.5%. He emphasizes that building an established Upwork profile with visible earnings is a long-term asset that attracts larger clients like Adobe and Stanley Black & Decker, and warns against taking payments off-platform, which can result in a lifetime ban.
Upwork's tiered commission system where freelancers pay 20% on the first $500 earned with a client, which drops to 10% once earnings exceed $500 with that same client.
View concept page →The strategy of consistently completing jobs and keeping earnings visible on your Upwork profile to establish credibility, attract higher-value clients, and increase the likelihood of receiving job invitations.
View concept page →A reframing of Upwork's fees not as a cost penalty but as a combined referral fee and marketing expense, since Upwork handles client acquisition that freelancers would otherwise pay for separately.
View concept page →The concept that Upwork's 10% fee is effectively reduced to ~6.5% because Upwork absorbs the standard 3–3.5% credit card processing fees that freelancers would otherwise pay independently.
View concept page →A freelance marketplace platform that connects freelancers with clients seeking services, charging tiered commission fees on earnings in exchange for client acquisition and payment processing.
View concept page →Upwork's strict policy against accepting payments outside of its platform, which can result in a permanent lifetime ban for freelancers who violate it.
View concept page →The practice of keeping all job earnings publicly visible on an Upwork profile rather than hiding them, in order to signal experience and attract more clients.
View concept page →The primary guest and SEO expert featured in the video, founder of an AI SEO agency that developed the Core 30 local SEO methodology and scaled to 97 plumber clients using AI-driven content and local link-building strategies.
View concept page →Using the standard freelance/agency referral fee (15–20%) as a benchmark to contextualize Upwork's 10% fee as competitive and reasonable.
View concept page →The practice of factoring Upwork's fees into your service pricing so that the fees do not reduce your intended take-home earnings.
View concept page →Upwork uses a tiered fee structure based on your earnings with a single client. For the first $500 earned with a new client, you pay a 20% fee (which equals $100 on $500). Once you pass $500 in earnings with that same client, the fee drops down to 10%. This means the more you work with a client, the lower your effective fee rate becomes.
The 20% fee only applies to the first $500 earned with any single client, so you'll get past it quickly if your clients are worth more than $500. Most serious freelance clients should generate more than $500 in earnings. Once you surpass that threshold, the fee drops to 10%, and since Upwork covers credit card processing fees (which typically run 3–3.5%), the effective fee is really closer to 6.5%. That's a very competitive rate compared to other client acquisition costs.
Upwork's 10% fee is actually lower than a standard referral fee. In Caleb's own agency, he offers a 15–20% referral fee to anyone who sends him a client that converts. Upwork only charges 10% for doing essentially the same thing — connecting you with paying clients — which makes it a competitive rate by industry standards.
No. When clients pay you through Upwork using a credit card, Upwork absorbs the credit card processing fees (typically 3–3.5%). This means if you're on the 10% fee tier, your effective cost is really only about 6.5%, since you would have had to pay the 3–3.5% processing fee yourself if you were handling payments outside of any platform.
Once you're past the first $500 with a client, Upwork charges a 10% service fee. However, since Upwork covers credit card processing fees of 3–3.5%, the real effective fee is approximately 6.5%. Caleb says he would happily pay a 6.5% fee for a new client any day of the week.
No, you should never hide your earnings on Upwork. Leave your earnings visible at all times. Every completed job adds to your visible earnings and job count, making your profile look more established. A stronger profile makes it easier to land bigger and better clients in the future, increases the likelihood of being invited to jobs, and makes clients more likely to read your proposals.
Instead of thinking of Upwork fees as a cost, think of them as a combination of a referral fee and a marketing budget. When you use Upwork, you don't have to pay for all the other expenses typically associated with landing clients (advertising, outreach, etc.). The fee you pay Upwork covers both the client referral and your marketing — and you only pay it when you actually earn money from a client, making it a performance-based marketing expense.
Taking payments off the Upwork platform is against their terms of service and can result in a lifetime ban from the platform. Upwork makes its money by connecting freelancers and clients, so if payments happen outside the platform, they lose their revenue. They take this seriously and frequently issue permanent bans to freelancers caught doing this. It is not worth the risk.
An established Upwork profile is a long-term asset that compounds over time. Every completed job permanently adds to your earnings total and job count on your profile. As your profile grows, you become more credible, get invited to more jobs, and clients are more likely to open your proposals. Caleb notes that his own established Upwork profile has allowed his agency to land major clients like Adobe, Stanley Black & Decker, and Skillshare. The fees you pay early on are an investment in building that profile.
Caleb recommends starting by landing small jobs to build up your profile. As your earnings and number of completed jobs increase, you become more established and more attractive to larger, higher-paying clients. The key is to not be discouraged by fees early on — treat them as a marketing investment. Over time, your profile becomes a valuable asset that attracts better clients with less effort.
Yes, Caleb recommends adjusting your pricing if needed to account for Upwork fees. The key is not to be turned off by the fees but to simply factor them into your rates. Since you only pay fees when you earn money, and since the fees function as a combined referral and marketing expense, building them into your pricing makes them manageable and keeps your net earnings where you want them.
Yes, according to Caleb, Upwork fees are absolutely worth it and are even a 'steal.' Here's why: (1) You only pay fees when you're actually earning money. (2) The fees function as a combined referral fee and marketing budget, replacing costs you'd otherwise pay elsewhere. (3) Upwork covers credit card processing fees, reducing the effective fee to about 6.5% at the 10% tier. (4) Every job you complete builds your profile permanently, compounding your ability to land bigger clients over time. Caleb considers his Upwork profile one of his agency's most valuable assets.
The Upwork fee drops from 20% to 10% once you have earned more than $500 with a single client. This threshold is tracked per client, not across all your earnings. So for each new client relationship, you start at 20% for the first $500, then move to 10% for earnings beyond that with the same client.
Upwork's entire business model is built on connecting freelancers with clients and taking a percentage of the transactions that happen through their platform. If freelancers and clients move their payments off-platform, Upwork earns nothing from those transactions despite having made the initial connection. To protect their revenue, Upwork actively monitors for off-platform payments and issues lifetime bans to freelancers who are caught doing this.