Ensuring timely and secure payments is a top priority for freelancers. Some of the best ways to get paid as a freelancer are through bank transfers, digital wallets, cash, checks, credit cards, and freelancer marketplaces. To help guarantee your payment as a freelancer, it is important to set clear payment terms and conditions, choose a reliable payment method, and communicate with your clients clearly.
- Freelancers can choose how to get paid by setting their rates and fees.
- There are various payment methods that freelancers can use to help make it easy for their clients to pay them.
- Having a contract in place, offering various payment methods, sending invoices, and making regular follow-ups are some ways freelancers can help ensure they get compensated.
- The best way to get paid as a freelancer depends on the nature of your work, your clients’ preferred payment method, and the geographical location of both you and your client.
Different Ways Freelancers Get Paid
Because freelance work encompasses a wide range of services and skills, the methods by which freelancers get paid can vary significantly. To learn how to get paid as a freelancer, here are some common ways that freelancers receive compensation for their work:
A common approach among freelancers is to charge clients based on an hourly rate. This method is straightforward and transparent, as it allows clients to pay for the actual time spent on a project. It’s particularly suitable for tasks with variable workloads or those that require ongoing support. Examples include consultants, virtual assistants, and IT professionals.
Some freelancers negotiate project-based fees, where they agree on a fixed amount for the entire project. This approach is beneficial for both parties, as it provides clear cost expectations and project deliverables, ensuring that the scope of work is well-defined. Some examples are graphic designers, web developers, and content creators.
Some clients prefer to retain freelancers on an ongoing basis by paying a regular retainer fee. This payment structure ensures the availability of the freelancer and may be more suitable for long-term or recurring projects, offering stability for both parties. Freelancers that often use this payment structure are lawyers, IT experts, and other types of consultants.
In certain industries, freelancers may receive compensation in the form of commissions, often tied to sales or revenue generated. This method aligns the freelancer’s income directly with the success of the project or business, making it a performance-driven approach. Examples include affiliate marketers and sales representatives.
Freelancers in content creation, marketing, or sales may charge based on quantities or metrics, such as per word, per page, or per leads generated. This method allows for flexibility in pricing and can be adapted to the specific output of the freelancer’s work. Some examples are writers paid per word, graphic designers paid per design, or marketers paid per lead generated.
Payment Methods for Freelancers
As a freelancer, it’s crucial to have a variety of payment methods at your disposal to accommodate the preferences and needs of your clients. The best payment method for freelancers is one that is convenient and acceptable for both the freelancer and the client. Here’s an overview of some common payment methods used by freelancers:
Payment apps/Digital wallets
While less common in the digital age, some clients may still prefer to pay in cash for local or in-person services. Be sure to issue a receipt for all cash transactions to maintain clear records.
Although it may seem convenient, accepting cash is not without risks. Be on the lookout for fake money that may find its way to payments made to you. Read our guide on how to detect counterfeit money.
Traditional paper checks continue to be a reliable way to receive payment, especially from clients who are not familiar with digital payment options. It is often preferred over cash for larger amounts. Ensure the check is properly addressed, and verify banking details to avoid bounced checks.
Interested in opening a business checking account for your freelance business? Look for options in our list of the best free business checking accounts.
Bank transfers are a widely accepted method for freelancers to receive payments. Clients can transfer funds directly from their bank account to yours. It’s a secure and straightforward option, but international transfers may incur additional fees. In the US, there are two main types of bank transfers:
- ACH transfers: Transfers that use the Automated Clearing House (ACH) network are called ACH transfers. They are secure, cost-effective, can be set up for recurring payments, and with same-day ACH, can be completed within the day. Learn more about ACH payments and how you can accept ACH payments.
- Wire transfers: Electronic transfers of funds by banks and money transmitters, like Western Union, are called wire transfers. These can be domestic or international. Nowadays, wire transfers are quick, secure, and reliable.
Digital payment apps offer convenient and quick transactions, making them a popular choice for freelancers. Some of the commonly used apps and digital wallets include PayPal, Venmo, Apple Pay, Google Pay, and Zelle.
There are also money transfer apps or online payment services that are popular among freelancers for accepting payments. Some of these providers include Wise, Payoneer, Rapyd, and Skrill.
Learn more about payment apps and digital wallets in our guides:
Accepting credit card payments can simplify the payment process for your clients, as it allows them to pay with ease. You can set up a merchant account to receive credit card payments, but take note that these typically incur processing fees. Nevertheless, it can make a huge difference because it is convenient and secure. Here are several methods you can use to accept credit card payments:
- Payment link: If you want to make the process even more streamlined, you can generate a payment link using a payment processing service provider. This link can be sent directly to your client, and they can click on it to make a payment. Payment links are perfect for when you need to receive a payment quickly, and you can send them via email or messaging apps. Check out our list of the leading online credit card processors.
- Virtual terminal: A virtual terminal is a web-based application that allows you to manually enter a client’s credit card information. It’s particularly handy for freelancers who offer services over the phone or in person. You can securely input the client’s card details and process the payment in real time. Learn how virtual terminals work and find options in our list of the best virtual terminals.
- Card reader. If you meet clients in person or sell products at events or markets, a card reader can be a great tool. These small devices connect to your smartphone or tablet, allowing you to accept credit card payments on the spot. You can swipe, insert, or tap cards to complete transactions, making it a versatile solution for freelancers who need to process payments in various locations.
However, these card readers often need to be purchased. Instead of purchasing one, you may turn your iPhone or Android phone into a contactless card reader. Learn how you can do this using tap to pay.
Find more options for accepting payments in our guide to the best payment processing for freelancers.
If you’re using freelancer marketplaces like Upwork, Freelancer, Fiverr, or Guru, these platforms typically have built-in payment systems to facilitate transactions. While convenient, be mindful of the platform’s fees and terms.
When choosing the right payment method for your freelance work, consider your target clientele, the nature of your services, and your geographic location. Offering multiple payment options can make it more convenient for clients to compensate you. However, it’s essential to establish clear payment terms and ensure you’re following best practices to guarantee your financial stability as a freelancer.
Sending an Invoice as a Freelancer
No matter which method you choose to get paid as a freelancer, sending an invoice is the best way to request payment and let your clients know the different ways they can pay for your services.
An invoice also helps in the documentation of the services rendered and the payment arrangement. It can be as simple as a piece of paper letting your client know that payment is due or you may use invoicing software.
Some invoicing services allow the client to choose to pay through bank transfers, payment apps, and credit cards. You can send your clients an invoice that includes a payment link or a “Pay Now” button. The invoice will detail the services provided, the total amount due, and a secure method for your clients to enter their credit card information and make the payment. This method is particularly useful for one-time projects or services with fixed prices. Look for options in our list of the best invoicing software for small businesses.
Tips to Get Paid as a Freelancer
While being a successful freelancer involves honing your skills and delivering quality work, ensuring that you receive fair compensation is equally vital. Here are some valuable tips to help you get paid reliably as a freelancer:
1. Do a background check
Before accepting any project, take the time to research your potential client. Look for reviews and check their online presence. If necessary, ask for references to verify that they are legitimate clients who work with freelancers. This initial due diligence can help you avoid unreliable clients or potential payment disputes.
2. Sign a contract or agreement
A written contract or agreement is a cornerstone of a professional freelancing relationship. It should outline the scope of work, deadlines, payment terms, and any other pertinent details. Having a signed document protects both you and your client.
- Set clear terms. Ensure that the terms and conditions in your contract are crystal clear. Define the project’s scope, milestones, and any additional services not included in the original agreement. Clear communication helps prevent misunderstandings and misinterpretations.
- Indicate rates or fees. Clearly state your rates or fees in the contract, so there is no ambiguity about what you expect to be paid for your services. If your pricing structure is variable, make sure you specify the factors that may influence the final cost.
- Agree on payment terms. Work with your client to establish a mutually agreeable payment schedule. Decide whether you’ll be paid on an hourly, project-based, or other basis, and set expectations for when payments are due.
- Indicate consequences. Define in your contract what will happen if the work is not delivered as expected or if payments are not made on time. Whether it’s late fees, pausing work, or termination of the project, having consequences outlined can encourage prompt payments and responsible behavior.
3. Consider requiring an advance payment
For larger projects or with new clients, requesting an advance payment is a wise practice. This ensures you have some compensation upfront, reducing the risk of non-payment or project abandonment.
4. Offer various payment methods
Give your clients flexibility by accepting multiple payment methods, as mentioned earlier. This not only makes it easier for them to pay you but also demonstrates your professionalism and client-centric approach.
5. Send invoices
Create and send invoices promptly for the work completed or as per the agreed-upon schedule. Ensure your invoices are accurate and well-structured, and include all relevant information, such as your payment details and a breakdown of services rendered.
6. Follow up
Stay organized and diligent about following up on outstanding payments. Send polite reminders if due dates are approaching or have passed. Maintain excellent organization and proactively monitor overdue payments. Oftentimes, a gentle reminder is all that’s needed to prompt your client to send the payment.
7. Maintain detailed records
Keeping track of your day-to-day bookkeeping tasks will make it easier for you to stay on top of your income and expenses, let you know when to follow up on outstanding invoices, prevent you from underpaying income taxes, and help you in case of payment disputes. Find in-depth tips on good bookkeeping practices for freelancers in our guide or take a look at our top recommendations for bookkeeping services for freelancers.
8. Communicate clearly & regularly with your client
Maintain open lines of communication with your client throughout the project. Discuss any changes or challenges promptly, and keep them informed of your progress. Good communication fosters trust and can mitigate payment disputes.
Other things to consider when you get paid as a freelancer
In addition to the tips above on how to get paid as a freelancer, here are several other considerations:
Freelancers are often responsible for managing their own taxes. It’s essential to understand the tax regulations in your jurisdiction, including income tax, self-employment tax, and deductions you may be eligible for.
Consider consulting with a tax professional or using accounting software to keep your finances in order. Setting aside a portion of your earnings for tax payments can prevent financial surprises during tax season.
In the unfortunate event that you encounter non-payment or contract disputes, having legal resources at your disposal is crucial. Familiarize yourself with the small claims court process in your area, as it can be an effective means of recovering unpaid fees.
Additionally, explore online platforms that offer legal templates for contracts and agreements, making it easier to protect your interests. Consider joining freelancers’ associations or organizations that offer legal support and resources, particularly if you work in industries with complex legal requirements.
Building a network of professional connections within your local area and specific freelancing niche can be highly beneficial. It can help keep you in the loop with preferred and new freelancer payment methods in your area or niche.
Aside from these, networking can lead to referrals and partnerships with businesses in your community. Connecting with fellow freelancers and potential clients can also open up opportunities for collaboration and knowledge sharing. Attend industry-related events, join online forums, and engage with social media groups to expand your network and stay updated on industry trends.
Getting paid correctly and in a timely manner is vital to freelancers. There are many different payment methods and freelancers can offer several options to clients for increased payment flexibility. Setting clear payment terms, having clear processes in place for invoicing and following up, and maintaining transparent communication with your clients can help ensure that you receive the right compensation without hampering your productivity.