5 Ways to get Paid as a Freelancer or Consultant

The Best Forms of Payment for Freelancers

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The freelancing industry is booming—and the numbers are proof that this profession is on the rise. According to a survey by Freelancers Union and Elance-oDesk (now Upwork), there are 53 million Americans doing freelance work—with tens of millions likely to follow. Business Insider predicts 40 percent of Americans will be freelancers by the year 2020.

If you plan on freelancing at some point in your career or are currently a freelancer, one of the first things you’ll need to decide is which forms of payment you’ll accept.

Like anything, some forms are better than others.

5 Forms of Payment for Freelancers

Checks. Accepting checks is one of the easiest ways to get paid as a freelancer. The biggest advantage is there are no fees for depositing a check into your bank account, making checks one of the best forms of payment for many. The downsides to accepting checks are waiting for the check to arrive in the mail and waiting for the check to clear in your bank account. If you need your payment as soon as possible, there might be a better way to get paid other than having to rely on a check.

PayPal. PayPal is the most common form of payment freelancers receive. It’s free to set up an account and clients can pay you electronically as soon as your work is completed. The money appears instantly in your PayPal account and you can then easily transfer the money over to your checking or savings account.

The downside? Fees. For each payment you receive, you are charged a 2.9% transaction fee plus $0.30 of the amount you receive. While that might not seem like a lot, it can add up to thousands of dollars per year (or more) if you receive most of your payments through PayPal.

Credit cards. Freelancers can accept credit cards as a form of payment, normally completed through PayPal or another online payment system.

You can also purchase your own credit card processing equipment to accept payments from clients who might be having a hard time paying you. Equipment you will need includes wireless credit card terminals and other credit card processing software. Keep in mind that most freelancers who accept credit cards use apps to get paid—such as PayPal, Google Wallet or Wave, rather than purchasing their own equipment.

Electronic Funds Transfer. The easiest, quickest and least expensive way to get paid is through an electronic funds transfer, or EFT. Payments are sent directly from one bank account to another with no third party involved. The transaction typically takes two to four business days to move from your client’s bank to your bank, but once the money is there you do not need to worry about transferring it again, like you would with PayPal. The disadvantage of EFTs is your client might be charged for transferring money from their bank to a different bank. Because of this, most clients that hire freelancers prefer to use checks or online apps to pay their freelancers.

Square Cash. Similar to PayPal, Square Cash is an online option for freelancers to accept payments.

Instead of having to transfer the money from your online account over to your bank account, though, the money goes directly into your bank account. Like an EFT, the money will take a few business days to show up in your account. The fee is also less than what PayPal charges at just 1.5% per payment received. For personal use, sending money from one person to another is free of charge.

If you’re a freelancer, it’s usually best to have multiple ways to accept payments from clients. Some clients might be most comfortable sending you a check whereas others might prefer to only use PayPal. If you prefer one payment method over another, talk with your client and see if you can reach an agreement.