While Upwork publicly lists its pricing structure for freelancers, the long-term costs for businesses can be substantial. Upwork connects businesses with independent professionals for various projects, but the overall transparency and cumulative costs often leave businesses looking for more cost-effective solutions.
As an end-to-end solution committed to transparency, Teilur Talent believes it is critical to understand how much a client pays and how much a developer keeps of that payment. This article aims to dissect Upwork's pricing model, and provide insights on how Teilur Talent's transparent pricing model can be a great alternative for companies seeking a partner in international tech recruiting.
Upwork Pricing for Companies in the U.S.
Upwork employs a fee structure that includes various charges for both freelancers and agencies:
- Freelancer Service Fees: Freelancers pay a 10% service fee on their earnings. For example, if a freelancer earns $500, they pay $50 in fees, resulting in a net earning of $450.
- Agency Service Fees: Agencies also pay a 10% service fee on contracts.
- Project Pricing: Projects and prices are set by the clients who need the services, and freelancers can make counteroffers. This dynamic can result in a wide range of pricing, from as low as $5 per hour to over $130 per hour for software development.
- Exceptions: Upwork offers various specialized fee structures for different contract types, sometimes providing reduced or zero fees:some text
- Upwork Payroll: Freelancers paid through Upwork Payroll are managed by a third-party staffing firm, exempting them from the standard 10% service fee.
- Any Hire Contracts: If a client hires a freelancer they found outside Upwork, or converts an existing Upwork freelancer to a direct hire, these contracts can have negotiated fees and may not incur the typical 10% charge.
- Direct Contracts: These involve clients without Upwork accounts but who pay through Upwork, incurring a reduced 5% service fee instead of the usual 10%.
- Bring Your Own (BYO) Contracts: Freelancers who bring their clients to Upwork can benefit from a 0% service fee or the standard 10% rate, depending on the specific arrangement.
These fees can add up, making financial planning more complex for businesses. For instance, hiring a freelancer at $22.22 per hour results in a 10% fee of $2.22 per hour. If the freelancer works 12 hours, the client is charged $266.64, with the freelancer earning $239.98 after fees. This example highlights the potential financial impact of Upwork pricing.
Moreover, the flexibility in project pricing can lead to significant variations, with hourly rates for software development often exceeding $130. This variability requires careful budget management and may pose challenges for companies seeking consistent and predictable costs.
In comparison, Teilur Talent offers detailed pricing breakdowns and utilizes a transparent rate policy, ensuring clients are fully informed about their expenses. By providing clear insights into all associated costs, Teilur Talent helps businesses manage their budgets more effectively and avoid unexpected financial burdens.
Upwork Pricing Review
A review on Product Review highlights the high-quality service provided by Upwork but also mentions the high cost associated with their platform. An anonymous client reported issues with freelancer reliability and lack of support from Upwork's team, resulting in lost time and money. The client expressed frustration with the lack of protection and support, illustrating the financial risks involved. In contrast, Teilur Talent's pricing is affordable and transparent. For example, a mid-level developer costs $5,000 per month, which translates to $60,000 annually. This significant cost difference underscores the value Teilur Talent offers through its commitment to pricing transparency and cost efficiency.
Another review on G2 praises Upwork for its selection of contractors and ability to handle both short-term and long-term projects. However, it also notes the unpredictability of contractor availability and the necessity of verifying the quality of work through samples. While Upwork provides access to a global talent pool, these reviews highlight the importance of transparent pricing and reliable support, areas where Teilur Talent excels.
Our thoughts on the pricing structure of Toptal
While it's not possible for us to find details about how much of what a client pays ultimately goes to a candidate, we believe clients looking for transparent and straightforward pricing may want to look at other alternatives.
Our opinion is that if they are charging a client more than $12,000 monthly for a developer, they should at the very least be giving $9,600 to the candidate, but it's likely that it's even less than that.
What Hiring Managers Should Ask Before Choosing a Talent Partner
Before partnering with any talent provider — whether Toptal, Teilur, or others — hiring managers should consider asking the following key questions:
- What percentage of the fee actually goes to the talent?
- Are replacement or satisfaction guarantees included in the contract?
- How are regional salary benchmarks determined?
- Is there full transparency in how rates are broken down?
- What is the long-term cost difference between hiring directly and through a platform?
These questions can help businesses make informed decisions and ensure that pricing aligns with both market realities and ethical compensation practices.
Conclusion
While both Upwork and Teilur Talent offer valuable services in tech talent outsourcing, client experiences highlight critical areas for improvement in Upwork's transparency and cost management. Teilur Talent emerges as the superior alternative, embodying the principles of clarity, efficiency, and predictability in every client interaction. If pricing transparency is important for you, consider a company that has transparent rate policies.
Explore our transparent pricing model with our price calculator below and see how you can benefit from our services.
