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There’s no doubt collaborating with freelancers can add fresh ideas and new perspectives that will help propel your company forward. Your first hurdle: Finding the right freelancer by posting your project.

It takes an awesome job post to attract top talent. The job post will typically lay out essential details such as a description of the project, clear deliverables, a timeline, and your estimated budget. But then comes an important question: Which payment structure is best for your project?

When you engage a freelancer through the Upwork site, there are two different payment structures: Hourly and fixed-price projects. It can even be helpful to use both: Start with a smaller fixed-price project, then transition to hourly for the longer term.

We’ll look at some of the pros of each and provide tips for you to consider when posting your next project.

With an hourly project, you’re invoiced for time worked on your project. This can be an effective option for longer-term projects or if you and the freelancer are unsure how many hours the work will take. Billing is automatically done once a week, and you can verify the freelancer’s bills by reviewing screenshots of the freelancer’s computer in the Work Diary. Payments may qualify for Upwork Hourly Protection.

A fixed-price project has a set price. It can be ideal for a project with finite deliverables and a clear scope you can predict in advance. Payments are made at predetermined project milestones, but one milestone is funded at a time and the payment is held in escrow and only released when you are happy with the work completed. Payments may qualify for Upwork Fixed-Price Protection.

These structures help you with simple and safe hiring through Upwork. Here’s a closer look at each payment structure to help you determine which is the right choice for your project. In their proposals, freelancers may suggest a different structure and may have good reasons for doing so.

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Flexibility. Hourly billing can be a great option for projects where more flexibility is needed—maybe you and the freelancer aren’t sure how many hours a project will take, the scope of work could be variable depending on outside factors, or your timeline is likely to change.

Clear communication. Good communication is key for effective work. An hourly project gives both of you an opportunity to connect throughout the project lifecycle, so you can share status updates and address challenges as they arise.

Longer-term relationships. Because hourly projects can be more flexible, they can be a good option for both you and the freelancer when you plan to work together on a repeat basis: You and the freelancer have the flexibility to add to the scope of work without having to create a new project.

Hourly project features at a glance:

  • Payments may qualify for Upwork Hourly Protection.
  • To keep your budget in check, you can agree to a maximum number of hours that can be billed on a weekly basis.
  • The Upwork Desktop app includes a time tracker, which can help protect both you and the freelancer from issues with disputed hours or work productivity.
  • If agreed, freelancers can add hours manually to a weekly timesheet, which allows more flexibility for offline work. These hours do not qualify for Upwork Hourly Protection.


Get to know new talent. A fixed-price project can be a great way to start working with a new freelancer or to get used to working with freelancers if you haven’t done so before. It can also be a good option when you’re working with freelancers who are new to Upwork; they may have the skills you’re looking for, but not have the history on the Upwork site you’re looking for.

Set expectations. A fixed-price project works well for a single project with a narrow scope of work; before work starts, you and the freelancer negotiate pre-determined milestones and a clear end date. You’ll know exactly what the deliverables are and when you’ll receive them. You can also be confident you and the freelancer are on the same page from day one.

Short-term projects prevail. If you’re working with a short timeline, a fixed-price project can be easy and convenient since it has an established beginning and end—both in terms of scope and timeframe. But don’t forget, for bigger projects you can agree to a number of milestones or add additional milestones later.

Stay on budget. Since the price is confirmed up front, you can more easily manage your budget. You can pay for the whole project at once, or fund one milestone at a time if the project is broken into smaller deliverables. Funds are held in escrow and released only once you’ve reviewed and approved the work that’s been submitted.

Fixed-price project features at a glance:

  • Payments may qualify for Upwork Fixed-Price Protection and clients only pay for work that they approve.
  • Project milestones help set expectations on scope and deadlines for both you and the freelancer.

Ready to get started with your next freelancer project? Register for Upwork and post your job today!