So, you've decided to start freelancing. How exciting!

But it can quickly become overwhelming, even for seasoned professionals who've been doing this for years. They still face the regular challenge of running a complete business while trying to deliver their service to the best quality. That means you've got to do your own marketing, be a salesman, actually deliver the work and manage client relationships.

You've got to do everything yourself. And then, finally, the best bit of the job… getting paid. Except now you have to wade through a whole other world of problems, from deciding how you're going to invoice a client to finding the best payment options for freelancers. It's frustrating and complicated.

That's why we've put together this comprehensive guide on how freelancers get paid. So by the end, you’ll have the solution for complete payment flexibility for you and your clients.

What is freelancing?

Freelancing is the term for an individual who provides services on a project basis for clients. Rather than working for one employer with a long-term work commitment, you are able to work with multiple clients.

This gives you incredible flexibility to choose the type of work you do, the clients you work with and even how much you charge for your services.

You're essentially an independent contractor, usually delivering a very specific set of skills or expertise. For example, you may offer copywriting services, SEO services, or design services to support businesses and other individuals in achieving their goals.

With the huge rise of remote work and the gig economy, many more people are now freelancing. It's an attractive way to live a more flexible life whilst also giving you the opportunity to work with dozens, if not hundreds, of different businesses over the course of your career. In fact, Statista projects that by 2027, in the United States alone, there will be nearly 90 million freelancers. That would total more than 50% of the total US workforce.

Simply put, the freelance workforce is experiencing unprecedented growth. It's a fundamental shift in how work is getting done and people are getting paid for their skills.

Freelancer billing options

During your freelance career, you'll dramatically change the way you bill your clients over time. At first, it might seem obvious to start billing hourly, just like you were paid for at a normal job, but this can change as you develop your skills and services and understand the best way to bill for your services. Let's go through the different options:

Hourly billing

Hourly billing is easy to understand. You just charge an hourly rate for the time it takes to do the work. It's the most straightforward way to bill for projects. The hourly rate you can charge depends on the industry and your skills and experience. When starting out, you might start off at a lower rate and slowly increase. It’s common practice, with some reports revealing that 81% of freelancers choose to bill hourly. 

You can expect your hourly rate to be higher than that of a comparative full-time employment job. This is because you're being hired for a very specific skill set. And you've got to remember that to earn the same amount as you would do in an employed job, you need to be charging more to make up for the ‘unpaid hours’ doing admin and running your business.

The main downside is that it can incentivize slower work and penalize you for working efficiently as a freelancer.

Project billing

Project billing is charging a fixed fee for the specific deliverables of a project. It removes the idea of how long you spend on a project and focuses on the pure delivery of a particular job or service to a client.

As you get more efficient at your work and deliver projects in a shorter timeframe, moving to project-based billing will help you get paid more in less time. 

Your client knows exactly the upfront cost before you start and as a freelancer, you benefit from efficiency. Just watch out for scope creep, as this can effectively reduce your hourly rate as more work gets added to the project than originally agreed.

Per word billing

This is very common in copywriting and transcription services. Anything word-based can work on a per-word basis.

This is a great way to bill, as it allows clients to set expectations of how many words are required in a particular piece. Plus, it's easy to calculate the total cost based on your per-word rate. 

It provides clear metrics for both parties and scalable pricing based on the amount of words you're producing. But the downside can be that quantity is overvalued and quality is undervalued. Writers often look to hit word counts rather than deliver top-notch work.

Commission work

Some top freelancers charge commission for their work. They're confident in the results they can get and they essentially take a percentage of any sales or results they achieve. This is particularly prevalent in sales and marketing, where freelancer work directly contributes to sales.

The benefit here is it aligns the incentives of the freelancer and the client. What’s cool is it offers a freelancer potentially unlimited upside. On the downside, the income is unpredictable and there are a lot of moving factors beyond the freelancer's control.

Bounty work

Plenty of platforms out there that allow you to go and choose from pre-listed projects with set payments. Clients put out job postings requiring a freelancer to complete a project for a set price. 

This is great for freelancers as it sets the budget and the amount they can earn for a successful job immediately. There are no awkward negotiations and sales processes to navigate. 

It's a competitive market, though, with hundreds of people chasing this bounty-style work. This competition often drives project prices lower and lower as people compete solely on price.

When do freelancers get paid?

So, you know your service, you know your pricing model. You've spent hours working out your marketing and sales. The next question is, when do you get paid? Let's look at your options for when to take payment for freelance work:

Paying upfront

The most secure way for freelancers to get paid is full or partial payment before work begins. That way, you're safe in the knowledge that any work completed is already compensated for.

It can be hard to get clients to pay in full upfront, especially with a minimum track record and a new relationship. Both sides need to create trust in their relationship. But for a freelancer, it ensures 100% commitment from the client. They've paid, so there's no going back on the job or weaselling out of payments after the project. And it's great for cash flow, knowing the money is in your bank ahead of time rather than waiting till the work is complete and then chasing payment.

Paying at delivery

Payment on completion of a project makes sense to a lot of people. It's how we get paid in a normal job at the end of every week or month. We get paid for the hours that we've worked. This might seem like a natural way to do things as a freelancer.

It's simple to account for and it motivates you to get a job done. It requires a lot of trust because there's always a risk that the client won't pay. Adding to this, your income is sometimes delayed by weeks or even months, which can make cash flow hard on a big project.

Milestone payments

This is a nice balance between payment upfront and payment on completion. Funds are tied to certain deliverables within a project. So when you complete certain tasks, you’ll get paid. 

It provides regular cash flow for you as a freelancer and reduces risk for both sides. That being said, you need to ensure there are clear definitions of your milestones. This method does require additional administration and invoicing time for both parties.

Important payment considerations for freelancers

New freelancers might not appreciate all the different aspects that come into consideration when getting paid. At a normal job, most things are taken care of by your employer.  For freelancing, you have a complete business to run. Here are the critical aspects to consider when establishing the best way to get paid as a freelancer.

Taxes

You need to remember you are responsible for paying your self-employment tax. You need to plan ahead and understand that any money they earn is likely to be taxed. Of course, every tax rule is different in each country, so get expert advice in your location.

Make sure to how much tax you're going to pay and set aside that each time you get paid. Plus, if you're working with international clients, it's worth understanding how that affects tax in your country as well.

Self-employed people are also eligible for deductible business expenses, whether that's office supplies, payments to other subcontractors, travel and equipment like computers. 

Client reliability

Before starting work with any client, make sure to research them thoroughly. This can be hard with new businesses, but you should do your best to check that the person who is hiring you has a track record of reliable payments, is communicative and is easy to get along with.

It's often a good practice to start with a smaller project to test out the working relationship. This will make sure both parties get on nicely before embarking on bigger, longer-term projects.

Keep an eye out for red flags right from the off, such as excessive haggling or unclear scope of work, communication delays, or anything that doesn't sit right with you.

Consider contracts

To protect both parties, it's a good idea to put a contract in place. A written agreement that spells out exactly what's expected from both parties and the scope of the project. It should also include specific details on the deliverables, the timeline and the payment options for freelancers.

As you expand your service, you'll likely start to include clauses for a number of revisions, late payment penalties and cancellations. 

Setting expectations

During the initial sales and onboarding process, it's important to be very clear about the process, deliverables and timelines for your projects. Don't overcommit to projects just to try and win a client. If you are giving unrealistic timelines or pricing, it's going to lead to a frustrating experience with the client as you overpromise and under-deliver.

Keep the communication channels open to make sure there are no misunderstandings. This will help both sides know exactly where they are on a project. Don't be afraid to address scope changes immediately with revised terms and payment options rather than just saying yes to everything a client does.

How to get paid as a freelancer

Finally, you've got your contracts in place, you've worked out your project pricing, you've got the thumbs up and the client has signed on the dotted line. Now, it's time to start invoicing. So, how do freelancers get paid? Well, there are several different options, from bank transfers to crypto payments and all have their pros and cons to understand.

Bank transfers

A bank transfer is simply a direct account-to-account money movement. The client sends money directly from their bank account to your bank account. This is really good for domestic transfers, which in many countries can be processed within one to three days. In others, they can be almost instant and even be completely free of charge.

It is a simple direct deposit without interference from unnecessary third parties, payment fees and setting up new online payment portals. 

On the downside, it can be time-consuming for clients to input and set up payments within their bank accounts. Then, if a payment error is made to the wrong bank account, it can be hard to retrieve or cancel.

It’s terrible for international transfers too. Moving money across borders and exchanging currencies can be very costly and slow through the traditional banking system. This ends up eating heavily into your profits and cash flow. Not good.

Ideal for: Freelancers with domestic clients, those handling larger payments where percentage-based fees would be substantial and those who want direct deposits without third parties involved.

Credit or debit cards

You could set yourself up so that clients can pay you directly using their card. For freelancers who work directly with a client in person, perhaps something like a personal trainer, you use a payment processor, card machine, or invoicing system that accepts cards.

Adding to this, you could use a digital payment platform that allows you to accept card payments through a specialist invoicing system. The client can fill out their card details and pay you just like you would do for an e-commerce shopping experience.

On the downside, you need to pay large processing fees, which for freelancers can be 2 or 3% of the payment. This cuts into your profit margin. There's also potential for chargebacks along with time to set up all of the correct systems and linking to your bank accounts.

Overall, it's quite a convenient and instant way for clients to pay you, but it can be expensive.

Ideal for: Freelancers who meet clients in person, those whose clients expect card payment options and those who need immediate payment processing.

Wire transfers

Wire transfers are particularly secure and useful for larger payments. It’s worth considering if you're working on a large project, particularly with international clients. When a client sends you a payment via wire transfer, the funds move directly between banks through a secure network.

They can typically be faster than standard bank transfers and they're difficult to reverse once sent. Positive for freelancers as it's hard for the client to reverse and take their money back. Extra peace of mind for you as a freelancer.

The major drawback is the cost. Wire transfers typically come with significant fees, often ranging from $20-50 per transaction, sometimes charged to both the sender and recipient. This makes it prohibitively expensive for most.  The fixed fee structure makes it a no-go for smaller payments. It is a cumbersome, expensive way to get paid as a freelancer.

Ideal for: Freelancers handling large payments (typically over $1,000), those doing high-value projects with international clients and situations where payment security is critical.

Online payment services

Online payment services have flourished over the last decade, particularly as the world does more remote work online. As we already know, freelance work is growing exponentially. You'll have heard of services like PayPal, Stripe, Venmo and others. Well, PayPal leads the market with a more than 45% share, followed up by Stripe, which has around 17% of the market share.

These are both great online payment services that work well both on web and mobile devices. They serve as intermediaries that facilitate payments between you and your clients. Typically, you can access various ways to get paid, from simple payment links to sophisticated invoicing systems. Most even offer credit card processing, direct bank transfers and even their own bank accounts.

They make for a really well-rounded and simple way to take money from all over the world, both domestic and international transfers. You can even use handy currency conversion features built straight into the platforms.

Plus, they add an extra element of trust with these well-known names and logos on your invoices. Simply put, they're user-friendly and fast.

There is a big downside to these payment gateways for freelancers! The massive fees. At every turn, payment services take a chunk of your money, from transfer fees to currency exchange fees to withdrawal fees. The totals add up really quickly, which frustrates a lot of freelancers.

You're also reliant on a middleman and it's not uncommon for accounts to be frozen, locking your funds until you can reactivate your accounts. That’s devastating for cash flow.

Ideal for: Freelancers with international clients, those who need integrated invoicing features and freelancers whose clients expect multiple payment options.

Checks

Checks aren't so common anymore. They're the traditional paper-based payment method, which doesn't work so well for digital freelancers. But for in-person clients, they might still be relevant as they require physical delivery and then a bank deposit.

With checks, there are no processing fees and for more traditional clients, it's might still their preferred payment method. However, processing can be slow, taking five or more days to end up in your bank account after deposit. Checks can also go missing and increasingly become outdated or not even a viable option for international clients.

Overall, while it can be cheap, it is a slow outdated process to use.

Ideal for: Freelancers working with traditional businesses or government clients, those handling larger amounts where processing fees would be substantial and those who don't need immediate access to funds.

In-person payments with cash

This is a simple one. Again requires face-to-face interaction between the client and the freelancer. The client simply pays your invoice directly in cash. This gives you immediate access to your funds. There are no processing fees. And for some people, they don't want a digital trail…

It's obviously very, very limited to local clients and honestly makes tracking for accounting purposes more cumbersome. For large payments, it is completely impractical.

Cash is king? Well, maybe not these days.

Ideal for: Freelancers working with local clients in person, those offering services like tutoring or coaching and situations where payment amounts are relatively small.

Crypto

Did you know it's now possible to accept payments from anywhere in the world using digital currency via blockchain technology?

It's becoming an increasingly popular alternative payment trend, particularly for digital workers who don't want to deal with the expense and frustration of cross-border payments.

Crypto payments are borderless transactions. Any person or business can send cryptocurrency directly to another person in the world. All without the need for a middleman bank or a payment processor. 

The funds move directly from one crypto wallet to another. And a lot of the time, payments can be instant or be settled within minutes rather than days. All costing just a few cents to make the transaction.

It delivers complete global accessibility, lower fees for international transfers and even the ability to make crypto investments along the way. 

Price volatility can be a problem in certain cryptocurrencies. Although stablecoins like USDT and USDC make a great alternative to this. These two stablecoins act as a digital dollar, always pegged one-to-one to the US dollar. These are the top choices for cryptocurrencies that can be sent across the world in seconds for almost no cost.

The only thing putting a lot of people off from crypto payments are technical learning curves and client pushback. But where there's a will, there's a way… That's why Acctual exists.

Ideal for: Freelancers working with international clients, those frustrated with traditional banking fees and delays and those comfortable with digital technologies who want faster global payments.

Getting paid as a freelancer with Acctual

Acctual modernizes the approach to freelance payment methods. It provides all the best features of traditional payment systems blended with the advantages of cryptocurrency. It's a hybrid payment solution.

“I’ve never experienced anything as seamless as sending an invoice, getting paid via bank transfer and having the funds land directly in my crypto wallet stress free!” —Abasiubong, Marketing Leader

The challenges of getting paid as a freelancer when working across borders disappear. With Acctual, freelancers can create professional invoices in minutes and clients enjoy complete payment flexibility. 

For example, a client can pay in Dollars or Euros while a freelancer receives funds in their preferred method. Or the client could pay you in stablecoins and you could get paid out automatically in dollars or euros.

It's complete flexibility, particularly for freelancers who struggle with complex payment systems. 

Acctual gives multiple options for freelancers to receive payment for freelance work:

• Direct crypto payments into your crypto wallet

• Let clients pay in stablecoins and get dollars deposited direct to your bank (or vice versa)

• Plus, there are built-in tracking and management tools that integrate with your current accounting systems.

Acctual even offers a free crypto invoice generator for you to try out without any commitment. While the full system gives enhanced features like invoice tracking and automated emails to streamline your whole payment process.

So whether you're a UX designer in Argentina, a virtual assistant in the Philippines, or a brand designer in Ukraine, you can enjoy Acctual's borderless payment system without the frustrating boundaries of getting paid. It's simply the best way to get paid as a freelancer who works with clients around the world.

Sign up today for a free account and streamline your international freelancer payment platforms.