By Lynne Gowers on 9th July 2015

How do freelancers get paid?

Everyone loves it when pay day comes around; you finally get to splash out on that bag/top/pair of shoes that you’ve been coveting for the past few weeks, and start wistfully searching online for 5* holidays to the Maldives.

However, as a freelancer you might have several pay days spread out over the course of the month. You might have regular clients who are billed monthly or weekly, depending on the value. In addition, you might have one-off projects which are billed on an ad hoc basis. Here, we take a look at how freelancers get paid; from the initial contract options to the possibility of overdue payments.

Contract options

Contract types will vary from project to project. For some companies, you might bill the same amount monthly for a set amount of work. For others it might fluctuate around the amount of work they require from you that month – which can be unpredictable and have a negative effect on both your cash flow and your work schedule.

Depending on the services they provide, some freelancers also get paid on retainer. This means that they’re guaranteed a set amount each month from a client, in return for completing pre-arranged deliverables. Although this method works really well for some freelancers, it’s not for everyone – your work load might be too unpredictable, or your clients might not be compatible with this type of arrangement.

Working on retainer is a great option if you want to add some consistency to your payment schedule, but make sure you have a watertight retainer agreement in place before you start (and ensure you include information about your required cancellation notice too).


If it’s a large project or new client, you might want to consider asking for a deposit upfront. The amount asked for varies from industry to service, but some freelancers ask for a 50% down-payment in advance of any work being done. Not only does it give you as a freelancer some peace of mind about payment being made, it also makes it easier to forecast cash flow – although the payment itself shouldn’t be treated as income until it’s paid in full. It also has its benefits for your clients too, as they’re reassured about the work being completed.


In order for them to pay you, your clients need to know exactly how much they owe. Increase the chances of them a) paying you and b) paying you the right amount, by issuing a clear invoice which breaks down your work and the fees due. If you want paying by bank transfer, include your bank details too to make payment easier.

For a more detailed look at how to create an invoice, you can read our tips here.

Payment options

Nowadays, there are a number of payment options you can offer your clients. Many people opt for a straightforward bank transfer, however if you do a lot of work for sole traders, they may want to pay you by cheque or PayPal. If you don’t mind paying the fees involved, you can also set yourself up so you can accept credit card payments. Alternatively, you can always jump on the Bitcoin ship – although we wouldn’t recommend it, just in case it sinks.

Overdue payments

Unfortunately, most freelancers will have to deal with overdue payments at some point of other. It’s worth sending gentle reminders that the deadline for a payment is approaching, to try and ensure invoices are paid on time. However, if they do end up being paid late you will be entitled to charge the appropriate late fees and bill an additional amount to recoup the costs for the time you’ve spent chasing the payment up.

A Contractor's Guide to Claiming Expenses

Written by Lynne Gowers
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