Ash The Great | Oct 31, 2017 | 0
The Definitive Guide to Getting Paid as a Freelancer With the Lowest Fees
Here is a list of methods for getting paid as a freelancer that tells you how to get the lowest possible fees. Before you skim the headers and decide that this article tells you things you already know, I offer you advice on each method and how you lower your fees when using them. Since we have a whole range of articles that explain how to send money to different countries without paying over the odds, we have left international payments out of this article. This article offers you ways of getting paid as a freelancer from people in your own country. Some of the payment methods listed in this article have international options, but they have not been covered in this article.
Getting Paid As A Freelancer With PayPal
Get yourself a PayPal account, get yourself verified, and start getting paid as a freelancer. PayPal has relatively low fees on its own, it is very flexible, it is one of the most trusted online wallets in the world, and you may order a PayPal MasterCard so that you may spend on your card as well as online. Transfers are blisteringly fast, and in many cases the withdrawal process is very fast too.
Companies Offer A Subscription Where PayPal Fees Are Lowered
A word of warning, I have seen quite a few websites that offer to lower your PayPal fees, but they are actually advertising a third-party payment or invoicing company. Be very skeptical if a website says you may save on fees if you use one of their paid/unpaid subscription services. It is possible to use accounting subscription services to lower PayPal receiving fees, but be very wary because the subscription service has to make its money back in some way or another.
Request To Be Paid Less Often
Exploit the fact that PayPal has a flat fee and a percentage fee. The fee is 2.9% plus $0.30 USD for standard accounts. Receive more money per transaction in order to save a little. For example, if you receive $10, then your fee is 29c + 30c, totaling 59c, which is 0.059% of your $10. If you receive $100, then your fee is $2.90 + 30c, totaling $3.20, which is 0.032% of your $100. Do note that PayPal fees vary from country to country.
Be Wary If You Factor Your PayPal Fees Into Your Invoice
Read the terms and conditions, as I had to, and you will see that including a charge for PayPal receiving fees is a clear violation of your PayPal account agreement. On the other hand, you may add processing charges onto your invoices without explicitly mentioning that they cover your PayPal receiving fees. In addition, when you set your prices, your money-receiving expenses should have already been factored in like all your other overheads.
Don’t Ask To Be Paid As A Friend
Getting paid as a freelancer is tough enough as it is, and it sucks that you have to pay fees to receive money from PayPal, but do not ask your client to pay you as a friend or family. PayPal says that you may transfer money to your friends and family without paying fees, but they are smart enough to know who is your friend and who is sending you money as payments.
You may get away with it a few times, but eventually, PayPal is going to start wondering why you are receiving so many payments and are not paying fees on them. There is a strong chance that they will fine you for fees that you have not paid over the years.
If you are receiving a one-off payment from somebody, then you may like to risk having them pay you as a friend or family member so that you do not have to pay fees, but don’t make a habit of it or it may turn ugly.
Getting Paid As A Freelancer With A Bank Transfer
Is getting paid as a freelancer with a bank transfer going to cost you money? In most cases, it is not going to cost you a penny. It may not even cost your payer any money as there are plenty of banks that offer free bank-to-bank transfers.
For example, in the USA, there are plenty of banks that will allow their users to send transfers for free if they use an ACH transfer that usually takes overnight on a business day. There are also banks that allow domestic wire transfers for free. If your payer’s/client’s bank does charge for domestic transfers, then it will probably be a small transaction fee. Nevertheless, the cost for you as a freelancer should be negligible.
Incoming Wire Transfers And Avoiding Their Fees
One issue you may have is with incoming wire transfers. Your bank may charge you for receiving incoming wire transfers, though it is not very likely. It is more likely that your bank will charge you for receiving international bank transfers; your bank may not even allow international bank transfers. If your client is going to pay you via a bank transfer using a wire transfer, then find out if your bank is going to charge you for receiving. Consider opening a bank account with a bank that doesn’t charge for receiving wire transfers in order to save on these fees, or consider alternative payment methods where you will not be stuck with the fee.
Get An Account With A Bank That Doesn’t Charge
Ideally, you and your payer should seek out bank accounts that do not charge for bank transfers and incoming transfers. I know that this isn’t much of a tip, since you probably already knew it already, but why are so many people still paying fees for sending or receiving bank transfers.
For example, there are people with TD bank accounts who are paying $3.00 to send money to other bank accounts, and $7.00 if they want to send money to other accounts within 24 hours, (TD Bank’s wire transfer fees are far worse). US Bank has a very similar policy that hurts payers.
Have your payer send money via a bank transfer from a bank that doesn’t charge transfer fees, and get an account that doesn’t charge you for receiving.
Getting Paid As A Freelancer With A A Multi-Currency Account For Overseas Payments
Oh Boy Oh Boy, are the banks going to charge you for this one. I can’t think of a single bank off the top of my head that is going to let you have a multi-currency account without charging you a fee. So, there are two ways you can go about it.
Examine Your Options To See If A Multi-Currency Account Works Out Cheaper
Examine all your options and figure out of having a multi-currency account is going to be the cheapest option for you. For example, if you do a lot of business in your home country and another country, then it may be worth keeping your foreign currency in your account until you need it (i.e. don’t convert it). By not converting, you may save money in a way that covers what you are spending to keep your multi-currency account open.
Opt For A Package Deal With A Multi-Currency Account Included
Another option is to buddy up to your bank and get a package deal. Maybe strike a deal where you have your mortgage with your current bank, and you have a paid share dealing account, and negotiate to where you can have your multi-currency account fees waived.
For example, I know that CitiBank has packages like this where you get a bunch of different accounts for free if you maintain a balance of $200,000. I also know that HSBC lets you have a bunch of different accounts (savings, investment, multi-currency), if you sign up for them all with one of their package deals.
Getting Paid As A Freelancer With A Check
Just how many fees are there associated with a check? There are not that many in this day and age. Most banks will allow you to deposit your checks without paying a fee, and even if you have a business account, your fee for depositing is usually tiny. Plus, most banks allow for mobile deposits, which means you don’t even need to spring for traveling money to drag your ass down to the bank.
The Problem With Checks
The biggest problem most people have with checks is how long it takes before your money is made available to you. Firstly, it takes time to receive your check from your client, you then need to deposit it, and then you need to wait for the check to clear. It all takes an overly long time when you compare checks with being paid digitally.
Faster Cashing Means Bigger Fees
It is imperative that you do not pay extra fees to have your check credited to your account early. Do not use companies that offer to cash your check today if you give them a slice of your check. They are highly avoidable fees that you shouldn’t be paying. If your finances are in such a state that you need your check cashed quickly, then put your efforts into that rather than trying to find ways of getting paid as a freelancer with the lowest fees.
Getting Paid As A Freelancer With A Money Order
As a freelancer, getting paid by Money Order is pretty fee-free. It costs the sender a fee to buy it and a fee to post it, but it shouldn’t cost you anything. Just like being paid by check, your bank will probably allow you to deposit your Money Order without paying a fee. If you have a business bank account, then depositing a Money Order will probably generate a very small fee of just a few cents.
Just like when cashing a check, you will have to wait for your funds to clear, but the whole process is fairly inexpensive. As I mentioned in the section above, getting paid will only generate fees if you try to have it cashed or credited early.
Fix Your Financial Problems Before You Pay Fees For Faster Money Order Cashing
As I mentioned before, if you are in a position where you need the money right away, then stop looking for ways of getting paid as a freelancer and start looking for ways to fix your finances. I sorted out my finances after I saw a book in a grocery store about how to stop impulse buying, and then didn’t buy it…wait…what? I knew my finances were in a bad state when a burglar broke in during the night to search for cash, and I woke up and started searching with her. My friends said I should have taken up life as a beggar on the streets with a funny sign…but I couldn’t afford a pen.
Getting Paid As A Freelancer With Skrill For Payments From The East
Maybe it is a little unfair to add the “From the East” element into this header, but in my experience, it is people in Eastern countries that tend to use Skrill more than people in Western countries. This is probably because Skrill is happy to do business in countries that other payment processing companies will not touch. Even if the country you are dealing with also has bank transfers, PayPal, and other payment processors, the person you are dealing with probably has contacts/customers/clients in countries that payment processors don’t touch. Skrill has very lax and unfriendly payer and receiver protection, and they charge high fees, but that is the price you pay for being able to use Skrill to deal with people in certain countries.
Examine And Exploit Their Fee Structure
The sender has to pay a fee for sending, and the sender has to pay fees for certain types of uploading, (such as with a MasterCard, Visa, etc.). It costs you nothing to receive money, so feel free to receive away.
The ugliest receiver fee on Skrill’s fee schedule is the fee they charge for withdrawing. You cannot avoid the withdrawal fee by simply sending the money onward because there are sending fees.
The only way to exploit Skrill’s fee structure in this case is to exploit the fact they charge a flat fee for withdrawals. They charge you $5.50 each time you withdraw, so you need to withdraw when you have a high balance.
For example, if you withdraw $11.00, they are going to take 50% of your withdrawal. If you withdraw $550, they are only taking 1% of your money when they remove your $5.50 fee.
Have Your Client Pay You In Your Currency
There is a 3.99% currency conversion fee. If you don’t want to eat the fee yourself, then have your client pay you in your own currency. I know this may be difficult because your client probably doesn’t want to pay the conversion fees anymore than you do, but the 3.99% fee is one heck of a chunk of your money. It may even be worth switching to another payment method if your client simply will not agree to pay you in your own currency.
Think about it for a second, if you are paid $500 every month from your client, you are paying $239.40 in conversion fees per year, and that doesn’t include the other fees that Skrill takes from you. In such a circumstance, it may be worth finding a more receiver friendly payment system and offering to lower your freelancing rates by 1-2% as an incentive for your payer to start using another payment method.
Get Your Money Out Within 12 Months
Skrill charges a fee of $3.00 per month if your account is inactive for a full year. Get your money out within 12 months or use your account frequently to avoid this fee. As I mentioned, you can allow your money to accumulate so that you pay a smaller percentage when you withdraw, and you can keep your account active by continuing to be paid into it and continuing to check up on your money.
I am not saying that the inactivity fee is unfair, I am just saying that it is such an unnecessary fee for a freelancer to pay out—especially when it is so easily avoidable.
Getting Paid As A Freelancer With A Payoneer Account
Payoneer is a business-to-business payment system that favors the payer, but since this is an article about getting paid as a freelancer with the lowest fees, I have dug up a few ways to save on fees when using Payoneer.
Payoneer allows you to send payment requests to your client. Add an invoice to it if you wish, and the payer need only click a link and following the instructions in order to pay you. Sadly, there are fees for receiving money, fees for withdrawing your money with your Payoneer MasterCard, and fees for withdrawing your money into a bank account.
Payoneer Is Not “Receiver” Friendly
Do not suggest using Payoneer to your client because it will save your client money while punishing you. On the other hand, if your client wishes to pay you by Payoneer, then you may have a hard time convincing your client to pay by another method because Payoneer is very cheap and very convenient for a payer.
Payoneer’s Advice Is That You Spend With Your MasterCard
You pay a fee for receiving and you pay a fee for withdrawing to your bank account and with your MasterCard. Payoneer suggest that if you wish to avoid these withdrawal fees, then you spend with your Payoneer MasterCard. You cannot avoid the fees when getting paid as a freelancer with Payoneer, but you may be able to avoid withdrawal fees if you spend in stores and online with your MasterCard. There are no fees for making purchases.
The only thing is that your purchase must be recognized as a purchase and not as a cash advance. For example, if you go to WalMart and buy a bag of potatoes, then that appears on your statement as a purchase and you are not charged a fee. On the other hand, if you go to a Casino (online or offline) and buy gambling chips, then that is considered a cash advance, which Payoneer interprets as a withdrawal.
Try To Have Your Client Pay You In EUR, GBP or USD
When you receive funds, they are credited to your Payoneer account in your own currency. For example, if you are paid in USD, but you live in Japan, then your USD balance is automatically converted into Japanese Yen.
There is a 2% conversion fee, which you cannot avoid in many cases because the conversion happens automatically. The only way to avoid the conversion fee is to not have your currency converted. That means, if you use US dollars, then have your client pay you in US dollars. If you live in Europe, then have your client pay you in Euros, and if you live in Great Britain (the UK), then have your client pay you in Great British Pounds.
You cannot get around the conversion fee by having your client pay you in your local currency, unless your local currency is USD, GBP or EUR. For example, if you are living in Japan, you cannot ask your client to pay you in Japanese Yen because Payoneer doesn’t allow it. Payoneer only allows senders to send USD, GBP and EUR.
You Can Overdraw With Your Payoneer MasterCard
I only mention this because some people are unaware that their Payoneer MasterCard may generate a negative balance, especially since most prepaid cards do not allow you to overdraw on your account. There are no fees associated with overdrawing on your Payoneer MasterCard, they simply recoup the overdrawn funds the next time you are paid.
There are some merchants who are able to force a charge on (take money from) your card, even if you have no funds in your account. The most common example is gas stations. In addition, if you are using pay at the pump machines at a gas station, they may decline your card because they may look for a per-authorized amount (between $75 and $99 usually), and your card may not allow a per-authorized amount.
Consider “Not” Applying For The Payoneer MasterCard
You are able to avoid getting the Payoneer MasterCard if you pay attention while you are signing up. Simply do not follow through on the section that asks if you want a Payoneer MasterCard. In some countries, you have to sign up for your Payoneer account and then submit an application for a Payoneer MasterCard.
I know I mentioned earlier that you may be able to avoid withdrawal fees if you spend money with your card rather than withdrawing it, but most people are going to need the cash rather than a balance on a prepaid card. If you do get a Payoneer MasterCard, then you are going to have to pay $29.95 every year in maintenance fees, which is not much money over the course of a year, but it is an avoidable fee that may be worth avoiding.
Getting Paid As A Freelancer With Bitcoin For International Payments
This one may not be a popular entry into our getting paid as a freelancer article, but you are able to save money when receiving money if you use bitcoin. The only problem is that you have to learn a fair amount about how the bitcoin trades work, and you have to give exchanges massive amounts of personal information before they trust you. Plus, there is the whole issue of if you can trust the exchanges, exchange fees, and your client’s willingness to pay you with bitcoin. To start you off, here are some links to our articles on bitcoin, followed by very short tips on saving money when getting paid as a freelancer with bitcoin.
What Is Bitcoin? An Ultra Simple Explanation Of Bitcoin
How to Use Bitcoin to Pay for Stuff Online – Have You Tried Using Bitcoin To Pay
How to Convert Bitcoin to Cash
How to Buy Bitcoin With Paypal
How to Pay Freelancers With Bitcoin
How to Buy Bitcoin: The Ultimate Beginner’s Guide
Bitcoin Vs Ethereum Vs Litecoin in 2017
Should You Invest in Bitcoin?
Cheapest Ways to Buy Bitcoin
There is also a brillaint website for learning all about bitcoin, cryptocurrency, and getting paid by it called Crypto Income. That website covers a whole bunch of stuff that we have only touched on.
Short Tips On Bitcoin To Look Into When You Are Bitcoin Savvy
- Arrange to have your payer make payments when the price of bitcoin is very low. Your client may not go along with this, but what if you issued your invoices around the times when the price of bitcoin has fallen?
- Finding the cheapest bitcoin exchange and finding the safest are two different things. I am not a fan of giving away oodles of my personal information in order to verify myself on a bitcoin exchange. Perhaps try to balance finding the cheapest with finding exchange that doesn’t want everything from photographs of your driver’s license to your grandma’s shoe size.
- Instead of having your client pay you to your personal wallet, have your client pay you directly to your account (wallet) that you have with your exchange company. This will help to save on the transfer fee you pay when you transfer from your wallet to the exchange.
- Opt for lower fees by agreeing to have the money transferred to your exchange more slowly. Pay a lower fee and your bitcoin is moved slightly slower, whereas if you pay a higher fee then it moves more quickly. Take this tip on board, but remember that transferring fees are not very high and it may be worth kicking in a few cents worth of bitcoin to get things moving a little more quickly.
- Consider holding on to your bitcoin payments until the price of bitcoin rises. At the moment in 2017, the price of bitcoin just keeps going up, and if the same situation exists when you read this, then you have two options. You can hold on to your bitcoin and hope the price keeps going up, or you can exchange your bitcoin now with the fear that there may be a crash that see the price of bitcoin fall significantly…the choice is yours.
Getting Paid As A Freelancer With Omesigo If You Wish To Spend In The East
There is a cryptocurrency called Omesigo that has the potential to be a big thing in the east. There is a good chance that many people in certain eastern countries are going to start using Omesigo, that they are going to start spending with Omesigo, and that they will start using debit cards with their Omesigo currency. It may be worth getting paid as a freelancer with Omesigo and holding on to the currency. If you are looking to start spending in the East in a few years, then it may be worth having a few Omesigo in your cryptocurrency wallet. The money you save, and the money you make, will probably (not a guarantee) be a drop in the ocean when compared to any sort of fees you paid to have your currency converted into Omesigo.
Getting Paid As A Freelancer With Escrow And Freelance Websites
Escrow and freelance websites have been lumped together because they have similar themes. Escrow allows your client to give money to a third party, and the third party holds onto the money until your freelancing job is complete. If there is a dispute, then the Escrow company handles the dispute. It helps to stop the payer and the freelancer getting screwed over, and it is commonly used when people are buying houses.
You Can Save On Loss But Not On Fees With Escrow
Saving money using Escrow is a little less direct. There is no way to get around Escrow’s fees. If you are going to use Escrow, then I recommend you only do it if you are receiving a very high sum and you are worried you may not receive it when the job is done. getting paid as a freelancer with Escrow may help you prevent loss. You cannot save on fees, but if you are worried about not being paid for all the work you are putting a lot of work into your project, then Escrow offers a fair amount of reassurance.
Be sure that you document all of your client’s requirements, including saving emails/texts/letters, and including creating a contract that suits you and that your client cannot wiggle out of. In addition, save all documented/photographic proof that you have completed your project to the client’s requirements, and save all communications, especially the ones where your client confirms that parts/all of your project have been completed.
If your client tries to wiggle out of paying, then you may start an Escrow dispute where Escrow looks at your evidence and your client’s evidence and makes a ruling on who gets the money. In addition, if you see confirmation that your client has paid money into Escrow, then at least you know that your client has the money and is not pulling your chain. Plenty of client’s promise big payments, and it is good to know if they actually have the money they are promising to hand over on completion.
Using Escrow in this way, especially for big payments, it handy if you are actually dealing with a third party/sub-sub contracting worker. For example, Joe BlabberKnockers hires you and says, “I will give you $19,000 to do this project.” Yet, Joe has actually taken the same project from another client where he gets $23,000. Joe has you do the work, hands over your work to his client, and his client pays (or doesn’t), and then Joe figures he will keep all the $23,000 and you can go spit. If you deal with Escrow in the manner I have mentioned, then Joe will be unable to produce the $19,000 to put into Escrow, and you will have good cause to treat Joe BlabberKnockers with extreme caution.
Can You Avoid The Need For Escrow With Partial Payments
The only way I can see Escrow’s massive fees being worth the money is if you are getting paid as a freelancer with large sums of money and you are worried about not being paid at the end. If that is the case, maybe you can avoid using Escrow by asking for partial payments.
I dabbled with writing dissertations for college students in my earlier writing career. FYI, I don’t recommend it. I used to approach subjects I had never studied before and get a GPA of 3.2 – 3.8 (2:1 in the UK, which is 60-69% out of 100) for my dissertation work. I don’t know if that is a damning fact surrounding the education system, or if I am some sort of Good Will Hunting genius who can write 12,000-word dissertations on just about anything in two days. It was taxing work that had relatively shitty pay. Nevertheless, when I dealt with essay writing services that I didn’t know or didn’t trust, I used to charge the essay writing services in sections. I would write the first 3000 words, send it over, wait for payment, and then write another 3000, send over the work, wait for payment, and so forth. Your client may not agree to it, but what has your client got to lose?…unless your client is insisting on full payment when the job if fully complete because your client is not planning on paying you.
Getting Paid As A Freelancer With With Freelance Websites
There are freelance websites out there that offer a similar thing to Escrow. I am going to resist the urge to list a bunch of freelance websites because most of them can go suck a turnip (aka, I tried them in the past and I hate them). However, let’s take the example of Freelancer.com.
Don’t get me wrong, Freelancer.com sucks, but they don’t suck as hard as many of the others. Plus, they keep making the website less and less free by taking away the privileges that free accounts have, which is going to scare members away. Nevertheless, Freelancer.com offers an Escrow service.
When you accept a job, or when you are part-way through accepting a job, you can ask for milestones. You can have one big milestone that is paid at the very end of your project, or you can set it into small “milestones” where you receive each payment after each element of your project is completed.
The Freelancer.com website charges the payers for making milestone payments rather than the people who receive the money. However, the recipient of money has to pay a fee for receiving, but there are methods where you may withdraw money for free. For example, if you use PayPal to withdraw your money, then you can avoid their withdrawal fees.
Using freelancing websites that offer an Escrow/milestone system will help you avoid the types of losses I covered when I described using Escrow. It makes it harder for your clients to screw you over. If you wish to lower your fees when using freelance websites, then you have to examine the freelance websites themselves and figure out their weaknesses. For example, you could have your client pay part of your fee outside of the freelance website, or you could use the withdrawal method that doesn’t charge fees. Each freelance website has areas where you can sneak around their fees. It is best if you trust your client before you try to avoid the fees because it is not worth allowing your client to get away without paying for sake of saving a few cents here and there.
Getting Paid As A Freelancer With Lower Fees
Okay eCheck.org fans, there are quite alternative ways of getting paid as a freelancer, so instead of running through each one in detail, I have mentioned a few of them here and added a tip or two on how to lower your fees.
Try coupons and discount deals, such as their first transfer for free offer. Weigh Western Union up against other payment options, especially if you or your receiver want to pick up cash. Try to avoid sending money that needs to be converted because Western Union doesn’t have great rates. Avoid their faster services because they charge more, and always opt for their lowest fee options, such as transferring from a debit card to another person’s bank account, (which usually has an upper fee limit).
Steer clear of companies and websites that claim they can send money via MoneyGram with smaller fees that MoneyGram offers because it is a common claim that scammers make. There is a flat rate and an upper limit fee for people sending US dollars from the US to another place in the US, which gives you a bigger incentive to send larger amounts rather than smaller amounts. Try to avoid making currency conversions with MoneyGram because they offer a poor rate.
Most banks (sending or receiving) will charge a nasty fee for sending or receiving international wire transfers, so try to avoid them. Many banks charge a fee for sending wire transfers but not for receiving them. If you are getting paid as a freelancer by wire transfer, then make sure your bank doesn’t charge for receiving them. Even consider receiving them into a personal account and moving the money over to your business account since your business account is likely to charge for receiving wire transfers for not for receiving internal money transfers. You may have the advantage if you are receiving wire transfers because more banks charge for sending them rather than charge for receiving them.
Paid In Cash
I do not recommend getting paid in cash unless you have a way of proving exactly how much you received and you have proof that you gave a receipt for the money. Tax services are becoming very good at recognizing when a person is being paid in cash, and it is only a matter of time before they catch you if you are not paying tax on your cash income. Besides that issue, getting paid in cash is fee free, especially if the sender hands it over to you and is not silly enough to send it through the post.
They have “MasterCard Send” that allows people to send and receive payments, and allows for people to withdraw money to their bank accounts. Be wary of Google Wallet because they are making their money rather sneakily. Do all you can to avoid their fees, such as having your client send money as a family or friend to avoid fees, and withdraw to a linked bank account because it is free to withdraw to a linked bank account.
Avoid using non-major debit cards and credit cards, and use only major debit cards and bank transfers because they are the ones that are free. It takes between one or two days for your money to move.
Do not register as a self-employed person or a business. Try to maintain the image that you are using Square Cash for personal use and that you are receiving money from friends. Your transactions will remain free if the company thinks you are only using it for personal use. Transfers to your bank are usually instant.
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Do the same thing with Dwolla as you do with Square Cash. Try to keep your account registered as a personal account because personal account transfers are free. It takes between 3-4 days to move your money. In many cases, you won’t get to choose which payment method is used because you will have to accept the payment method your client chooses.