How To Handle Payments As A Freelancer

If you are a freelance worker, you will know that taking payment isn’t exactly a smooth ride sometimes. Unlike working for a company who pays you automatically through their own system, as a freelancer you will have to request payment after the work is completed. Unfortunately, there are many ways in which this can go wrong; from contracting issues, to payment methods, to costing disputes. As a freelancer, having these kinds of issues with your client can lead to conflict which results in no payment at all, or being cut off from future projects with that client. This, of course, can be detrimental to your career – even if it isn’t your fault. 

So how can you handle payments as a freelancer in a way which exemplifies your professionalism and clearly communicates your intentions and demands? Read on in this blog to find out!

  1. Contract

When you are a freelance worker, you need to have a contract. Not only will your client likely provide you with a contract to sign with their terms, but you will need to provide them with one containing your terms. This will ensure that you can break down exactly your rate of pay, your services, and your terms of ownership and intellectual property. This will allow you to have, in writing, some security if the client breaks your agreement or breaches the terms you have set out for your services. In addition, a contract increases your professionalism and allows you to come across as an experienced, serious expert in your field. 

In order to draw up a freelance contract, you can find many templates online which are modifiable to suit your exact needs and terms. Make sure you cover any and all possible discrepancies or misunderstandings; if you need assistance, you can have a lawyer look over the details for you.

  1. Cost breakdown: the pros and cons of fixed rate vs hourly rate

Then there’s the question of what to charge. As a freelancer starting out, you might have trouble estimating what you should charge for your services. Too low, and you might be taken for a ride – or not be taken seriously at all. Too high, and you won’t get any clients. It’s a tricky balance to strike. The best way to determine your starting costs would be to discuss rates with other friends or freelancers on forums online. You could also follow guidance from various unions and professional boards who will give an estimate as to what is appropriate. 

But the dilemmas do not stop there. For freelancers, the choice between charging a flat rate for a project or charging by the hour is forever a difficult one. Here are some pros and cons of each choice, so you can help decide which is best for you!

Fixed Project Rate: Pros!

  • You might end up earning more this way. If you were, for example, a freelance writer, your flat rate charge might be a few hundred dollars per 1,000 words. If 1,000 words, including research, writing, re-drafting and submitting the work, takes you about four hours, then you could do two projects per day at this rate. Hourly, you will likely earn far less than flat rate in this instance.
  • You can give the project the attention it needs. Every project is different, and will likely take up fluctuating amounts of time depending on the client and the nature of the project. If you are only paid by the hour, once you hit the number of agreed upon hours, you need to leave the project alone – even if you feel you could do more with it. However, if you are paid a flat rate, you can work on the project until you feel it is finished, giving you more licence over the end result. 
  • There might be fewer disputes. Flat rates are a much more straightforward way of getting paid. You quote your rate to the client, and they take it or leave it. You both know how much money is being handed over. An hourly charge is more complex; if you spend more hours than the client originally assumes, there could be a dispute over payment. 

Fixed Project Rate: Cons!

  • You might wind up getting underpaid. Okay, so either way, it is easy to get underpaid as a freelancer. If you are someone who pours all your energy into your projects, and spends every waking moment on them, you might want to steer clear of a fixed rate. This will likely lead you to be underpaid by the client for the amount you actually worked. 
  • This usually includes edits. Fixed rates will typically include one instance of re-working the service or product after it is delivered. This means if the client wants the whole thing re-done, you have to do it again – basically for free. Yikes.

Hourly Project Rate: Pros!

  • You can earn more this way, too! The way you are paid should really be a reflection on how you work. If you work slowly, methodically and rigorously, then an hourly rate will likely earn you more money. 
  • Healthier boundaries. If you are someone who gets way too involved in a project and will end up staying up all night to make it perfect, perhaps an hourly rate will help you set healthy boundaries. Usually, a client will state how many hours they have been signed off to commission you for – meaning that after that number, your work will be unpaid. This both motivates you to get the work done efficiently, and helps you set boundaries and know when to leave it alone. 

Hourly Project Rate: Cons!

  • You could be selling yourself short. If you aren’t careful, your hourly rate might not actually pay you enough for the expertise you have and the work you do. Plus, your materials – such as art materials, computer expenses or parts – might eat into that hourly rate pretty fast. Ensure that if you set an hourly rate, it reflects the experience and knowledge you have. 
  • You don’t get to throw yourself into the work as much. If you know you only have, say, five hours with a project, you might not allow yourself to delve deeply into the work. This is a shame, because the project may not therefore reflect your talent, just your ability to work to a strict time frame. 
  1. Invoicing

Once you have stated your rate and completed the work with a signed contract, now comes the matter of payment. As a freelancer, getting paid on time is a big challenge – especially if you are just starting out in your field. It is vital that your contract outlines not just your rates, but the payment method required and the time limit on payment. This means that your client will commit, by signing the contract, to paying you within your stated timeframe, at the correct amount, via your preferred method. Anything else, and they are breaching your contract. 

When your client has accepted the work and has decidedly stated that no further work or edits are required, you should immediately follow up with an invoice. An invoice should contain the following information:

  • Your full name and address, complete with your contact information. 
  • The full name, address and information of your client. 
  • The title of your project.
  • An invoice number.
  • A project description.
  • A cost breakdown, followed by the final amount owed.
  • A timeframe by which the payment must be made, which matches the time frame stated in your contract.
  • Your banking details, or any other details required to complete the payment.
  • Thanks and well wishes. 

To send an invoice, you can use an invoice app, a payment company such as PayPal, or create your own using a simple template and email it directly to the client. 

  1. Chasing Up

Unfortunately, some clients are sneaky and will try to get out of paying their freelancers. This is a terrible practise, but one that is often exercised, especially on young freelancers without much prior experience.

If your client has failed to pay you past the due date of your payment, you should send a follow-up invoice reminder, stating that the payment is due. This requires some courage, as young freelancers want to appear amiable; chasing up is a professional thing to do, as long as it is done in an unemotional way. Make sure to be polite but firm about this. If the company refuses to pay or simply ignores your requests, you should take legal advice. 


As a freelancer, you need to learn the tricks of the trade when it comes to taking payment for your services. A firm but fair approach is best, with clear terms expressed before the work is completed. Maintaining a healthy professional relationship with your clients includes being professional and unemotional about the financial side of things. Try these helpful tips next time you take payment, and see how much easier freelancing life gets!

Photo by Karolina Grabowska from Pexels

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