Contractor Fee Structures and Payment Terms

There are a few ways to pay freelance writers. Here are some to consider.

Hourly

Pros:

• You’ll pay your writer for the exact amount of work they do
• In many cases, writers work quickly and won’t have to bill for an excessive amount of time

Cons:

• If a writer spends longer on a piece than anticipated, you’ll pay the price

Per Word

Pros:

• You’ll have a general sense of how much you’ll pay per project
• If you set a word count, you’ll know exactly what you’ll owe

Cons:

• If you don’t specify a word count, you might owe more than anticipated
• Word counts can be limiting, and your writer may add filler

Per Project

Pros:

• You can set and uphold a strict budget
• You’ll know the exact amount you will pay for a given piece of copy

Cons:

• With fixed-price payments, you may pay your freelancer too little or too much for the work they’ve done

Retainer

Pros:

• You’ll be able to work with a freelancer indefinitely
• Freelancers are more likely to dedicate exclusive attention to your projects

Cons:

• You’ll pay your freelancer even if they haven’t completed a project recently

It’s up to you which payment structure you want to implement. Different types of payment plans are ideal for different types of tasks. Hourly is ideal for short-term projects like brief ad copy, while per word and fixed-price payments are ideal for long-form copy.

Ultimately, the payment structure you choose is contingent on the relationship you’re trying to build with your freelancer. If you need short-term help, stick to an hourly price structure.

If you want the freelancer to stick around for the long haul, consider paying by the word, by the project, or retainer fees.

It’s important to realize, however, that the vast majority of freelancers have a preferred method of payment. Some only take on fixed-price projects, while others always charge by the hour.

Each professional is different. When discussing payment, you must be willing to negotiate. Ask the freelancer how they typically charge and let them know how you’d prefer to pay them.

If your answers differ, many freelancers will accept your conditions outright or find a way to compromise. Others, though, won’t budge. Prepare yourself for any outcome. If the freelance writer doesn’t accept your terms, you will either have to change them or find another writer.

Now what?

You’ll need to decide when they’ll get paid. Most client-freelancer agreements implement a net-15 or net-30 payment plan. Net-15 agreements guarantee payment within 15 days of work completion, while net-30 agreements guarantee payment within 30 days.

In most circumstances, net-30 plans are ideal as they’re the easiest to integrate with your accounting department. Additionally, this longer timeframe provides a grace period for unexpected tasks.

When these situations occur, your freelancer can take care of them before they finalize and send an invoice. It’s easier for you, easier for them, and easier for your accounting team to keep track of.