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What is the oDesk Service Fee?

Jacqueline Pittenger
posted this on February 3, 2013, 10:29 PM

For Clients

Every time you are charged on a contract, oDesk receives a share in the form of the oDesk Service Fee. This fee is paid by your freelancer. All rates, bids, and charges you see as a client are inclusive of fees.

 

For Freelancers

The oDesk Service Fee is 10% of the total amount charged to the client. The fee is paid automatically each time your client is charged on a contract.

You, the freelancer, pay the oDesk Service Fee and it is never shown to your clients. Always talk to your clients about total charges inclusive of fees because they will only see the total billing rate or bid on your job applications, contracts, and profile.

Most of your reports show only total charges, inclusive of fees, same as the client would see. Fees are broken out in your Transactions and Earnings Reports. Your total billed is your legal income and the fees paid may be deductible business expenses.

Rate Calculator

Here's the rate calculator the freelancer sees when applying to a job:

 

EarnCompare.png

 

Anytime you see the rate calculator it will estimate what you’ll earn (net take-home pay after fees) to help you bid accordingly. We say “estimated” on the hourly version because rounding may occur when the hours are invoiced (see examples below). We charge the client the exact billing rate you enter. Sometimes the resulting 10% fee is a number with more than 2 decimal points that must be rounded to the nearest penny with each transaction.

We don’t say “estimated” on the fixed-price version, because we assume it’s invoiced in a single transaction, with the rounding as shown.

Example Fee Calculations

Earn18.png1) No rounding, estimate and earnings always match.

$20 per hour is charged to the client. 10% of that is exactly $2 per hour. The rate calculator estimates you’ll earn $18 per hour. No rounding is necessary, so your net earnings always match the estimate.

Earn20.png2) Rounding results in earnings slightly less than estimated.

You want to earn $20 per hour, so you use the rate calculator to estimate you need to charge the client $22.22 per hour. 10% of that rounds to $2.22 per hour.

  • Billed 1 hour:  
    • Your client is charged $22.22 (1 hour x $22.22).
    • The 10% fee is $2.222 or $2.22 when rounded down.
    • Your net earnings are $20.00 (same as estimated).
  • Billed 12 hours:  
    • Your client is charged $266.64 (12 hours x $22.22).
    • The 10% fee is $26.664 or $26.66 when rounded down.
    • Your net earnings are $239.98 ($0.02 less than estimated, 12 x $20 = $240).
  • Billed 39 hours:
    • Your client is charged $866.58 (39 hours x $22.22).
    • The 10% fee is $86.658 or $86.66 when rounded up.
    • Your net earnings are $779.92 ($0.08 less than estimated, 39 x $20 = $780).

Earn25.png3) Rounding results in earnings slightly more than estimated.

You want to earn $25 per hour, so you use the rate calculator to estimate you need to charge the client $27.78 per hour. 10% of that rounds to $2.78 per hour.

  • Billed 1 hour:  
    • Your client is charged $27.78 (1 hour x $27.78).
    • The 10% fee is $2.778 or $2.78 when rounded down.
    • Your net earnings are $25.00 (same as estimated).
  • Billed 12 hours:  
    • Your client is charged $266.64 (12 hours x $27.78).
    • The 10% fee is $33.336 or $33.34 when rounded down.
    • Your net earnings are $300.02 ($0.02 more than estimated, 12 x $25 = $300).
  • Billed 39 hours:
    • Your client is charged $866.58 (39 hours x $27.78).
    • The 10% fee is $108.342 or $108.34 when rounded up.
    • Your net earnings are $975.08 ($0.08 more than estimated, 39 x $25 = $975).

 


Please contact Customer Support with any questions or concerns regarding the oDesk Service Fee.

 
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