Articles on: Clients

Hourly vs Fixed Cost Contracts

goLance offers two options when creating contracts: Hourly and Fixed-Price

Hourly contracts:

Hourly contracts are an arrangement in which a freelancer and a client agree on an hourly rate during the proposal process. To keep track of the hours worked, freelancers are required to log their working hours using the goLance goMeter desktop application. All the hours worked by the freelancer are recorded in the Work Diary, which can be reviewed by both the freelancer and the client.

Hourly contracts come with the option for the client to enable Manual Time, which allows freelancers to bill hours without running the goMeter. The client can also set a weekly hour limit that freelancers cannot exceed. Any logged hours, whether through the goMeter or Manual Time, will not be counted towards billing if they exceed the weekly hour limit.

Payment for hourly contracts is processed on a weekly basis. Freelancers have until UTC midnight on Sundays to enter their hours worked for that week. These hours are then billed to the clients at UTC midnight on Mondays. Both the freelancer and the client have until Friday to review the work completed. If there are any disagreements between the client and the freelancer, a dispute can be filed before payment is released to the freelancer. If there are no disputes, the freelancer receives payment the following Wednesday.

The payment amount is based on the hourly rate agreed upon in the contract multiplied by the hours tracked in the work diary using the goMeter or added as manual time. Any hours worked over the weekly limit are not paid and shown as overtime.

The hourly payment process goes through these phases:

Charged on Mondays and payments sits in escrow (00:00 UTC).
Review period starts (5 days). During the review period, employers see the payment as withheld in their Invoices and Transaction reports. Freelancers can delete time from the contract's work diary. An employer can file a dispute. The dispute is resolved with the help of goLance representatives. A dispute can be approved, declined, or canceled. 
Settled on Fridays (13:00 UTC).
The review period ends. Security period starts (5 days). If time was removed during the review period or discarded by the approved dispute, the amount will be refunded to the employer's goWallet balance. A security period is needed for goLance in order to minimize the risks of chargebacks and fraud. Freelancers see their payments as pending during the security period in their Invoices and Transaction reports. The freelancer will see the paid amount minus the goLance fee in their reports. The security period is bypassed for freelancers who work for trusted employers. In this case, payment is released immediately after it has settled.
Released the next Wednesday (00:00 UTC, midnight)
Money becomes available and added to the freelancer's goWallet balance. This money is available to withdraw. Freelancers see their payments as paid in their Invoices, Reports, and Transaction reports.

Fixed-Price contracts: 

Fixed-Price contracts work differently than hourly contracts. Instead of working on an hourly basis and logging hours to the goMeter desktop application, fixed-price contracts work based on one or more payment milestones. A freelancer can bid a different amount than that of the job post along with a proposed number of milestones. After the client and freelancer agree on a fixed-price, payment milestones can be set up to pay the freelancer at certain times during a project. Funds are loaded into an escrow account for each milestone and then released to the freelancer after each milestone is complete.  Each milestone has a five-day security hold before it is released to the freelancer. 

Milestone goes through these phases:

Milestones are shown on the contract page. Milestones defined by the offer become automatically created when the offer accepted. To create a milestone, employers set its name and price.
When an employer funds milestone, their payment method is charged for the milestone amount. If payment succeeded, the milestone is shown as "in progress" so the freelancer knows that money was deposited by the employer. While the milestone is in progress, employers see the payment as "withheld" in their transaction reports.
Work Submitted, payment requested
When freelancers finish a milestone task, they submit their work and request the payment for this task. They can adjust the requested payment amount if the task scope has changed. The milestone is shown in the payment requested column on the contract page
If employers approve the work, they pay for the milestone. They can adjust the payment if the task scope has changed. If the paid amount is less than the activation amount, it will be refunded to their goWallet balance. If the amount paid is greater than the activated amount, it will be paid as a bonus.
Security period starts
Milestones have a 5-day security holding period (120 hours).

Please note that there is an option so the fixed price contract can be automatically funded, validated and paid on a regular basis (weekly, monthly, ...)

Updated on: 22/02/2023

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