[{"data":1,"prerenderedAt":1452},["ShallowReactive",2],{"page-\u002Fbest-payment-methods-for-freelancers":3,"related-\u002Fbest-payment-methods-for-freelancers":514},{"id":4,"title":5,"author":6,"body":7,"category":500,"date":501,"dek":502,"description":503,"extension":504,"featured":505,"meta":506,"navigation":507,"path":508,"readingTime":509,"seo":510,"sitemap":511,"stem":512,"__hash__":513},"content\u002Fbest-payment-methods-for-freelancers.md","Best Ways to Get Paid as a Freelancer: Payment Methods Compared","Daniel Reed",{"type":8,"value":9,"toc":482},"minimark",[10,15,19,114,117,120,124,127,135,168,171,183,192,198,202,205,211,214,234,242,247,251,258,261,276,279,284,288,295,302,305,319,326,331,335,342,345,350,354,386,403,406,449,453,458,461,465,468,472,475,479],[11,12,14],"h2",{"id":13},"send-a-2000-invoice-five-ways-and-the-spread-is-stark","Send a $2,000 invoice five ways and the spread is stark",[16,17,18],"p",{},"Run the math on a single $2,000 invoice paid through different methods and you lose between $0 and $70 depending on what you and your client use. Do that monthly for a year and you've either kept $840 or given it away. This isn't a rounding error — it's a deliberate choice.",[20,21,22,41],"table",{},[23,24,25],"thead",{},[26,27,28,32,35,38],"tr",{},[29,30,31],"th",{},"Method",[29,33,34],{},"Typical fee",[29,36,37],{},"You receive",[29,39,40],{},"Money in hand",[42,43,44,59,73,87,101],"tbody",{},[26,45,46,50,53,56],{},[47,48,49],"td",{},"Domestic bank transfer \u002F ACH",[47,51,52],{},"$0–$1",[47,54,55],{},"~$2,000",[47,57,58],{},"1–3 business days",[26,60,61,64,67,70],{},[47,62,63],{},"Direct debit (ACH pull)",[47,65,66],{},"~0.8% capped",[47,68,69],{},"~$1,985",[47,71,72],{},"2–5 business days",[26,74,75,78,81,84],{},[47,76,77],{},"Card via Stripe",[47,79,80],{},"2.9% + $0.30",[47,82,83],{},"~$1,941",[47,85,86],{},"2 business days",[26,88,89,92,95,98],{},[47,90,91],{},"PayPal (goods & services)",[47,93,94],{},"~3.49% + $0.49",[47,96,97],{},"~$1,930",[47,99,100],{},"Minutes, then payout",[26,102,103,106,109,111],{},[47,104,105],{},"Wise (cross-border)",[47,107,108],{},"~0.4–1% of amount",[47,110,69],{},[47,112,113],{},"Hours to 2 days",[16,115,116],{},"Fee percentages move around and vary by country, card type, and account tier — treat these as ballpark figures and check the provider's current pricing before you quote. The pattern, though, is stable: bank rails are cheap and slow-ish, cards and PayPal are fast and expensive, and cross-border specialists sit in between.",[16,118,119],{},"The right answer depends on who's paying you, where they are, and how fast you need the cash. Below is how each option actually behaves.",[11,121,123],{"id":122},"bank-transfer-and-ach-cheapest-but-client-dependent","Bank transfer and ACH: cheapest, but client-dependent",[16,125,126],{},"A direct bank transfer is the default for most B2B freelance work, and for good reason. Fees are negligible — often zero domestically — and there's no percentage skimmed off large invoices. On a $10,000 project that's the difference between paying nothing and paying $300+ to a card processor.",[16,128,129,130,134],{},"The catch is that ",[131,132,133],"strong",{},"you're relying on the client to push the money",". They have to log in, set you up as a payee, and actually hit send. That introduces delay and excuses (\"I'll do it Friday\"). Speed varies by country:",[136,137,138,150,156,162],"ul",{},[139,140,141,144,145,149],"li",{},[131,142,143],{},"US:"," Standard ACH takes 1–3 business days. Same-day ACH exists but isn't always offered. Wire transfers clear same-day but cost the ",[146,147,148],"em",{},"sender"," $15–35.",[139,151,152,155],{},[131,153,154],{},"UK:"," Faster Payments are usually instant or within hours, and free.",[139,157,158,161],{},[131,159,160],{},"Canada:"," Interac e-Transfer is near-instant for amounts under common limits; larger sums often go by EFT, which takes 1–3 days.",[139,163,164,167],{},[131,165,166],{},"Australia:"," PayID and Osko payments clear in seconds; standard transfers take 1–2 days.",[16,169,170],{},"To get paid this way cleanly, put your full bank details on the invoice and make them impossible to mistype:",[172,173,174],"blockquote",{},[16,175,176,179,180],{},[131,177,178],{},"Pay by bank transfer","\nAccount name: Jordan Lee Design\nSort code: 12-34-56 \u002F Account no: 12345678\nReference: INV-2026-014 ",[146,181,182],{},"(please include so we can match your payment)",[16,184,185,186,191],{},"The reference line matters more than people think — without it you'll spend time reconciling anonymous deposits. See ",[187,188,190],"a",{"href":189},"\u002Finvoice-numbering-best-practices","invoice numbering best practices"," for a system that makes matching painless.",[16,193,194,197],{},[131,195,196],{},"Best for:"," established clients, larger invoices, anyone domestic who'll pay reliably.",[11,199,201],{"id":200},"cards-via-stripe-or-square-friction-free-for-the-client","Cards via Stripe (or Square): friction-free for the client",[16,203,204],{},"When you embed a \"Pay now\" card link in your invoice, you remove every excuse. The client clicks, types a card number, done — no logging into their bank, no payee setup. That convenience measurably shortens the gap between sending an invoice and getting paid, which is why card processing tends to pay for itself even after fees.",[16,206,207,208,210],{},"Stripe's headline rate in the US is around ",[131,209,80],{}," per transaction; UK, Canadian, and Australian rates differ and international cards usually carry a surcharge of roughly 1–1.5% on top. Square and similar processors sit in the same range.",[16,212,213],{},"The trade-offs:",[136,215,216,222,228],{},[139,217,218,221],{},[131,219,220],{},"You eat the fee, not the client"," — in most jurisdictions you can surcharge card payments, but rules vary and some regions or card networks prohibit or cap it. Confirm before adding a fee.",[139,223,224,227],{},[131,225,226],{},"Payouts aren't instant."," Money lands in your Stripe balance fast, but the bank payout typically takes 2 business days (longer for a first payout while the account is verified).",[139,229,230,233],{},[131,231,232],{},"Chargebacks exist."," A client can dispute a charge weeks later. Keep your contract, deliverables, and approval emails so you can contest one.",[16,235,236,237,241],{},"Where cards genuinely shine is recurring work. If you bill the same retainer monthly, storing a card on file and auto-charging removes the chase entirely. Pair this with ",[187,238,240],{"href":239},"\u002Frecurring-and-retainer-invoices","recurring and retainer invoices",".",[16,243,244,246],{},[131,245,196],{}," consumer-facing work, smaller invoices, first-time clients, and anyone you have to nudge to pay.",[11,248,250],{"id":249},"paypal-ubiquitous-but-read-the-fine-print","PayPal: ubiquitous, but read the fine print",[16,252,253,254,257],{},"Almost everyone has a PayPal account, which makes it frictionless for international and consumer clients. The cost of that reach is some of the highest fees in this list — commonly around ",[131,255,256],{},"3.49% + a fixed fee"," for goods-and-services payments, plus a currency-conversion spread of roughly 3–4% when money arrives in another currency.",[16,259,260],{},"Two traps catch freelancers:",[262,263,264,270],"ol",{},[139,265,266,269],{},[131,267,268],{},"\"Friends and family\" is not for business."," It dodges the fee, but it also strips your buyer protection and may breach PayPal's terms. If a client offers to pay this way to save you the fee, understand you're giving up recourse — and that undeclared income still needs reporting.",[139,271,272,275],{},[131,273,274],{},"The currency conversion is where they get you."," Receiving USD into a GBP account and letting PayPal convert can cost more than the transaction fee itself. If you bill in several currencies, hold balances and convert deliberately rather than automatically.",[16,277,278],{},"PayPal's speed is its strength: funds appear in your balance within minutes, and you can often transfer to your bank within a day.",[16,280,281,283],{},[131,282,196],{}," clients who insist on it, small one-off jobs, marketplaces where it's the norm.",[11,285,287],{"id":286},"wise-the-cross-border-workhorse","Wise: the cross-border workhorse",[16,289,290,291,294],{},"For invoicing clients abroad, Wise (and similar multi-currency accounts) usually beats both banks and PayPal because it converts at the mid-market rate plus a transparent fee — typically ",[131,292,293],{},"0.4–1%"," depending on the currency pair — instead of burying a markup in the exchange rate.",[16,296,297,298,301],{},"The practical advantage is ",[131,299,300],{},"local receiving details",". A Wise account can give you a US account and routing number, a UK sort code and account number, a Eurozone IBAN, and Australian details. Your US client then pays you as if you were a domestic US business — cheap ACH on their end — and you hold or convert the funds when the rate suits you.",[16,303,304],{},"A worked example: a UK freelancer invoices a US client $3,000.",[136,306,307,313],{},[139,308,309,312],{},[131,310,311],{},"Via PayPal with auto-conversion:"," ~3.49% fee + ~3.5% FX spread ≈ £180+ lost.",[139,314,315,318],{},[131,316,317],{},"Via Wise:"," client pays into your USD details (free\u002Fcheap for them); you convert $3,000 to GBP for roughly 0.5% ≈ £12.",[16,320,321,322,241],{},"That's not a rounding error. For anyone with regular overseas clients, a multi-currency account is close to essential. More on the mechanics in ",[187,323,325],{"href":324},"\u002Fhow-to-invoice-international-clients","how to invoice international clients",[16,327,328,330],{},[131,329,196],{}," any freelancer billing in a currency different from their bank's.",[11,332,334],{"id":333},"direct-debit-for-retainers-you-dont-want-to-chase","Direct debit: for retainers you don't want to chase",[16,336,337,338,341],{},"Direct debit (a \"pull\" payment — Bacs in the UK, ACH debit in the US, PreAuthorized Debit in Canada, BECS in Australia) lets you collect an agreed amount from a client's account on a schedule, with their authorization. Tools like GoCardless specialize in this and charge low percentage fees, often ",[131,339,340],{},"under 1% with a cap",", far cheaper than cards for the same recurring billing.",[16,343,344],{},"The win is collection rate. Once a mandate is set up, you initiate the payment rather than waiting for the client. For ongoing retainers this can dramatically cut late payments. The downsides: setup requires the client to authorize a mandate (a small upfront hurdle), and clearing takes a few business days, so it's not for one-off rush jobs.",[16,346,347,349],{},[131,348,196],{}," monthly retainers, subscriptions, and any predictable recurring fee.",[11,351,353],{"id":352},"how-to-choose-a-quick-decision-guide","How to choose: a quick decision guide",[136,355,356,362,368,374,380],{},[139,357,358,361],{},[131,359,360],{},"Domestic client, large invoice, reliable payer →"," bank transfer \u002F ACH. Keep the fees at zero.",[139,363,364,367],{},[131,365,366],{},"Client you suspect will stall →"," card link. Removing friction beats saving 3%.",[139,369,370,373],{},[131,371,372],{},"Overseas client →"," Wise or another multi-currency account with local receiving details.",[139,375,376,379],{},[131,377,378],{},"Monthly retainer →"," direct debit, or a stored card on auto-charge.",[139,381,382,385],{},[131,383,384],{},"Tiny one-off or a client who only uses it →"," PayPal, eyes open on fees.",[16,387,388,389,392,393,397,398,402],{},"You don't have to pick one. The strongest setup is to ",[131,390,391],{},"offer two and let the client choose"," — a bank transfer option for those who'll use it, plus a card or PayPal link for the convenience-driven. List both clearly on the invoice. (For the mechanics of laying this out, see ",[187,394,396],{"href":395},"\u002Fhow-to-invoice-as-a-freelancer","how to invoice as a freelancer"," and ",[187,399,401],{"href":400},"\u002Fhow-to-send-an-invoice","how to send an invoice",".)",[16,404,405],{},"A few habits that protect the money once you've chosen:",[136,407,408,423,433,443],{},[139,409,410,413,414,418,419,241],{},[131,411,412],{},"State payment terms in writing."," ",[187,415,417],{"href":416},"\u002Fwhat-is-net-30","Net 30"," or net 14, due date spelled out — see ",[187,420,422],{"href":421},"\u002Finvoice-payment-terms","invoice payment terms",[139,424,425,428,429,241],{},[131,426,427],{},"Take a deposit on larger projects"," so you're never fully exposed. Here's ",[187,430,432],{"href":431},"\u002Fhow-to-ask-for-a-deposit-upfront-invoices","how to ask for a deposit upfront",[139,434,435,438,439,241],{},[131,436,437],{},"Set a late-fee policy"," and reference it on the invoice — see ",[187,440,442],{"href":441},"\u002Fhow-to-charge-late-fees-on-overdue-invoices","how to charge late fees",[139,444,445,448],{},[131,446,447],{},"Track the fees as a business expense."," Processor fees are generally deductible; keep the statements.",[11,450,452],{"id":451},"frequently-asked-questions","Frequently asked questions",[454,455,457],"h3",{"id":456},"can-i-pass-card-or-paypal-fees-on-to-the-client","Can I pass card or PayPal fees on to the client?",[16,459,460],{},"Sometimes. Surcharging is allowed in many places but restricted or banned in others, and card networks impose their own rules and caps. A cleaner approach is to build a small buffer into your rate, or offer a discount for bank transfer rather than adding a visible surcharge. Confirm what's permitted in your jurisdiction.",[454,462,464],{"id":463},"do-i-owe-tax-on-money-received-through-paypal-or-stripe","Do I owe tax on money received through PayPal or Stripe?",[16,466,467],{},"Yes — income is income regardless of how it arrives. Payment processors in several countries now report freelancer earnings to tax authorities above certain thresholds, but your obligation to declare doesn't depend on whether they report. Keep records of every payout and the fees deducted. Rules vary by jurisdiction; confirm with your tax authority or an accountant.",[454,469,471],{"id":470},"should-i-offer-more-than-one-payment-method","Should I offer more than one payment method?",[16,473,474],{},"Usually yes. Offering a free bank transfer alongside a card or PayPal link covers both the cost-conscious and the convenience-driven client, and removing friction tends to get invoices paid faster. Just make each option and its reference details unambiguous so payments are easy to match.",[454,476,478],{"id":477},"are-instant-payouts-worth-the-extra-fee","Are instant payouts worth the extra fee?",[16,480,481],{},"Rarely, unless cash flow is genuinely tight. Many processors offer instant payout for around 1–1.5% of the amount. For a $2,000 invoice that's $20–30 to save a day or two — fine in an emergency, wasteful as a habit. Standard 2-day payouts are free with most providers.",{"title":483,"searchDepth":484,"depth":484,"links":485},"",3,[486,488,489,490,491,492,493,494],{"id":13,"depth":487,"text":14},2,{"id":122,"depth":487,"text":123},{"id":200,"depth":487,"text":201},{"id":249,"depth":487,"text":250},{"id":286,"depth":487,"text":287},{"id":333,"depth":487,"text":334},{"id":352,"depth":487,"text":353},{"id":451,"depth":487,"text":452,"children":495},[496,497,498,499],{"id":456,"depth":484,"text":457},{"id":463,"depth":484,"text":464},{"id":470,"depth":484,"text":471},{"id":477,"depth":484,"text":478},"Getting Paid","2026-06-27",null,"A practical comparison of bank transfer, PayPal, Wise, Stripe, cards, and direct debit on fees, speed, and international reach for freelancers.","md",false,{},true,"\u002Fbest-payment-methods-for-freelancers","8 min read",{"title":5,"description":503},{"loc":508},"best-payment-methods-for-freelancers","PNMmI1WwgLOM-Bx9e5lgaTpj3aRsFfwoN8eXxp879qs",[515,943],{"id":516,"title":517,"author":6,"body":518,"category":934,"date":935,"dek":502,"description":936,"extension":504,"featured":505,"meta":937,"navigation":507,"path":938,"readingTime":509,"seo":939,"sitemap":940,"stem":941,"__hash__":942},"content\u002Fhow-to-bill-clients-for-expenses.md","How to Bill Clients for Expenses: Reimbursable Expenses on Invoices",{"type":8,"value":519,"toc":921},[520,524,527,534,537,541,544,556,559,579,582,586,589,595,601,608,611,615,618,623,754,760,763,771,775,784,788,803,813,826,830,838,842,855,866,870,877,880,884,918],[11,521,523],{"id":522},"what-counts-as-a-reimbursable-expense-and-what-doesnt","What counts as a reimbursable expense (and what doesn't)",[16,525,526],{},"A reimbursable expense is a cost you incur on a project that the client has agreed to pay back. You front the money, then recharge it. Classic examples: a train fare to a client site, a stock photo licence bought for their brochure, a domain and hosting plan set up in their name, or a specialist subcontractor you hired to finish part of the job.",[16,528,529,530,533],{},"What is ",[146,531,532],{},"not"," reimbursable is your ordinary cost of being in business. Your laptop, your accounting software subscription, your home office internet, your professional insurance — those are overhead. You recover them through your rate, not by itemising them on a client invoice. The line matters because clients push back hard when they see costs they consider \"your problem\" appearing on a bill.",[16,535,536],{},"The cleanest test: would this cost exist if the project didn't? A flight booked specifically for one client's workshop fails the \"would exist anyway\" test, so it's reimbursable. Your Adobe subscription would exist regardless, so it's overhead.",[11,538,540],{"id":539},"agree-the-rules-before-you-spend-a-penny","Agree the rules before you spend a penny",[16,542,543],{},"Most expense disputes are really scope disputes that surfaced late. Kill them in the contract or proposal. A short clause is enough:",[172,545,546],{},[16,547,548],{},[146,549,550,551,555],{},"Expenses: The Client will reimburse pre-approved out-of-pocket costs incurred on this project, including travel, accommodation, third-party software licences, and subcontractor fees. Costs above $150 per item require written approval in advance. Expenses are billed at cost and supported by receipts. Mileage is charged at ",[552,553,554],"span",{},"rate"," per mile.",[16,557,558],{},"Three things that clause does for you:",[136,560,561,567,573],{},[139,562,563,566],{},[131,564,565],{},"Sets an approval threshold."," Anything above the limit needs a yes in writing. Below it, you're covered to just spend and recharge.",[139,568,569,572],{},[131,570,571],{},"States the markup policy up front"," (here, \"at cost\" — no markup). Decide this deliberately; more on markup below.",[139,574,575,578],{},[131,576,577],{},"Requires receipts",", which signals you'll keep clean records and pre-empts the \"can you prove that?\" conversation.",[16,580,581],{},"Get the client to confirm expensive items by email before you commit. A one-line \"Booking the Tuesday flight at £142, confirming that's approved\" costs you nothing and turns a possible fight into a paper trail.",[11,583,585],{"id":584},"to-mark-up-or-not-to-mark-up","To mark up or not to mark up",[16,587,588],{},"There are two honest positions, and clients treat them very differently.",[16,590,591,594],{},[131,592,593],{},"Billing at cost (pass-through)."," You recharge exactly what you paid. A £142 flight becomes a £142 line. This is the norm for genuine third-party disbursements and it builds trust because there's nothing to argue about. The downside: you carry the cash-flow burden and admin for free.",[16,596,597,600],{},[131,598,599],{},"Adding a handling markup."," Some agencies add 10–20% to expenses to cover the time spent booking, coordinating, and financing the cost. This is legitimate as long as it's disclosed. What damages relationships is a hidden markup a client discovers by seeing the original receipt. If you mark up, either state the percentage in your contract or fold the handling into a separate \"coordination fee\" line rather than inflating the receipt total.",[16,602,603,604,607],{},"A middle path many freelancers use: pass genuine disbursements through at cost, but bill your own ",[146,605,606],{},"time"," spent managing a subcontractor or sourcing materials as normal billable hours. That keeps the expense honest and still pays you for the work.",[16,609,610],{},"For mileage, use your tax authority's standard rate as a defensible number rather than guessing. In the US the IRS sets an annual business mileage rate; the UK uses HMRC approved mileage allowance payments (commonly quoted as 45p per mile for the first 10,000 miles); Canada and Australia publish their own per-kilometre figures. These change, so check the current rate for your country each tax year.",[11,612,614],{"id":613},"how-to-list-expenses-on-the-invoice","How to list expenses on the invoice",[16,616,617],{},"Keep expenses visually distinct from your fees. Clients scan invoices, and burying a £600 subcontractor cost inside your service total invites suspicion. Two structures work well.",[16,619,620],{},[131,621,622],{},"Option A — a dedicated expenses block:",[20,624,625,641],{},[23,626,627],{},[26,628,629,632,635,638],{},[29,630,631],{},"Description",[29,633,634],{},"Qty",[29,636,637],{},"Rate",[29,639,640],{},"Amount",[42,642,643,657,670,683,695,707,722,738],{},[26,644,645,648,651,654],{},[47,646,647],{},"Web design services (June)",[47,649,650],{},"22 hrs",[47,652,653],{},"$85",[47,655,656],{},"$1,870.00",[26,658,659,664,666,668],{},[47,660,661],{},[131,662,663],{},"Reimbursable expenses",[47,665],{},[47,667],{},[47,669],{},[26,671,672,675,678,681],{},[47,673,674],{},"Stock photography licence (invoice #A-2231)",[47,676,677],{},"1",[47,679,680],{},"$79.00",[47,682,680],{},[26,684,685,688,690,693],{},[47,686,687],{},"Return train fare, London↔Bristol (12 Jun)",[47,689,677],{},[47,691,692],{},"$64.00",[47,694,692],{},[26,696,697,700,702,705],{},[47,698,699],{},"Subcontractor: copywriting (J. Okafor)",[47,701,677],{},[47,703,704],{},"$450.00",[47,706,704],{},[26,708,709,714,716,718],{},[47,710,711],{},[131,712,713],{},"Subtotal — services",[47,715],{},[47,717],{},[47,719,720],{},[131,721,656],{},[26,723,724,729,731,733],{},[47,725,726],{},[131,727,728],{},"Subtotal — expenses",[47,730],{},[47,732],{},[47,734,735],{},[131,736,737],{},"$593.00",[26,739,740,745,747,749],{},[47,741,742],{},[131,743,744],{},"Total",[47,746],{},[47,748],{},[47,750,751],{},[131,752,753],{},"$2,463.00",[16,755,756,759],{},[131,757,758],{},"Option B — a separate expenses invoice"," entirely, cross-referenced to the project. Useful when expenses are large or arrive on a different timeline than your fees, and when a client's accounts team codes reimbursements to a different budget.",[16,761,762],{},"Either way, name the specific supplier, date, and purpose on each line. \"Travel — $64\" is weak. \"Return train fare, London↔Bristol, 12 Jun client workshop — $64\" gets approved without a follow-up email. Attach the underlying receipts as a PDF; don't wait to be asked.",[16,764,765,766,770],{},"If you're building invoices by hand, the layout principles in ",[187,767,769],{"href":768},"\u002Fhow-to-make-an-invoice-in-excel-word-google-docs","how to make an invoice in Excel, Word or Google Docs"," apply here too — a clean expenses subtotal is just another block.",[11,772,774],{"id":773},"the-vat-and-sales-tax-part-people-get-wrong","The VAT and sales-tax part people get wrong",[16,776,777,778,397,781,241],{},"This is where recharging expenses gets genuinely technical, and the rules differ by tax and by country. Two concepts get confused constantly: ",[131,779,780],{},"recharges",[131,782,783],{},"disbursements",[454,785,787],{"id":786},"recharges-vs-disbursements-vat-registered-businesses","Recharges vs disbursements (VAT-registered businesses)",[16,789,790,791,794,795,798,799,802],{},"A ",[131,792,793],{},"recharge"," is a cost you incurred ",[146,796,797],{},"for your own business"," in order to deliver the service, which you then pass on. Your train fare to a client meeting is your cost — you bought the ticket, you travelled. When you recharge it, it becomes part of the consideration for your service, so in the UK and similar VAT systems you generally add VAT to it at your service rate, ",[146,800,801],{},"even if the original ticket was zero-rated or VAT-exempt",". That surprises people: a zero-rated train fare recharged to a client typically gets 20% VAT added because it's now part of your taxable supply.",[16,804,790,805,808,809,812],{},[131,806,807],{},"disbursement"," is a cost you paid ",[146,810,811],{},"as the client's agent"," — the goods or services were supplied to the client, not to you, and you merely handled the payment. A statutory fee (say, a companies-registry filing fee paid on the client's behalf) can qualify. Disbursements are passed on at exact cost with no VAT added by you, but they must meet strict conditions: the client received the supply, you were acting as their agent, and you show the cost separately. Getting this wrong means under- or over-charging VAT.",[16,814,815,816,820,821,825],{},"Practical takeaway for UK and EU-style VAT: most of what freelancers call \"expenses\" are actually recharges, not disbursements, so you add VAT. Read ",[187,817,819],{"href":818},"\u002Fuk-vat-invoices-explained","UK VAT invoices explained"," and, if you're near the threshold, ",[187,822,824],{"href":823},"\u002Fdo-i-need-to-register-for-vat","do I need to register for VAT",". Rules vary — confirm your specific situation with HMRC or an accountant.",[454,827,829],{"id":828},"us-sales-tax","US sales tax",[16,831,832,833,837],{},"Whether a reimbursed expense is taxable depends on the state and on whether the underlying item was taxable and how it's characterised. Reimbursed costs that are part of a bundled taxable service can be taxable; a separately stated pass-through of a non-taxable item may not be. There's no single national rule. The overview in ",[187,834,836],{"href":835},"\u002Fus-sales-tax-on-invoices","US sales tax on invoices"," is a starting point, but check your state.",[454,839,841],{"id":840},"canada-and-australia","Canada and Australia",[16,843,844,845,849,850,854],{},"For GST\u002FHST in Canada, recharged expenses generally follow the tax treatment of your overall supply; see ",[187,846,848],{"href":847},"\u002Fcanada-gst-hst-invoice-requirements","Canada GST\u002FHST invoice requirements",". In Australia, GST on reimbursements versus true disbursements follows a similar agent-vs-principal logic to the UK; a valid ",[187,851,853],{"href":852},"\u002Fwhat-is-a-tax-invoice-australia","tax invoice"," still needs the right GST breakdown.",[16,856,857,858,861,862,865],{},"One more trap: ",[131,859,860],{},"don't double-count VAT\u002FGST you've already reclaimed."," If you're VAT-registered and reclaimed the input tax on that £79 stock photo, you recharge the £79 net (pre-VAT) figure and add your own VAT on top. Recharging the VAT-inclusive amount ",[146,863,864],{},"and"," adding VAT again overcharges the client.",[11,867,869],{"id":868},"keep-the-receipts-and-keep-them-findable","Keep the receipts, and keep them findable",[16,871,872,873,241],{},"Every recharged cost needs a supporting document you can produce on demand: the supplier invoice, the ticket, the mileage log. Tax authorities can ask you to justify both the expense you claimed and the amount you recharged. Retention periods vary (commonly several years), so store them with the project. The practical mechanics are covered in ",[187,874,876],{"href":875},"\u002Fhow-long-to-keep-invoices-and-receipts","how long to keep invoices and receipts",[16,878,879],{},"A simple system: create a folder per project, drop every receipt in as you incur it, and log the date, supplier, amount, and whether tax was charged in a spreadsheet. When invoice day arrives the expenses block writes itself.",[11,881,883],{"id":882},"handling-the-awkward-cases","Handling the awkward cases",[136,885,886,892,902,912],{},[139,887,888,891],{},[131,889,890],{},"The client rejects an expense after the fact."," If it was under your approval threshold and inside the contract's categories, point to the clause. If it was over the threshold and you didn't get sign-off, you may have to eat it — which is exactly why the threshold exists.",[139,893,894,897,898,901],{},[131,895,896],{},"A subcontractor you're recharging."," You're the principal: you hired them, you pay them, you recharge the client. Their invoice is addressed to ",[146,899,900],{},"you",", and you issue your own invoice to the client. Don't just forward the sub's invoice.",[139,903,904,907,908,911],{},[131,905,906],{},"Foreign-currency expenses on an overseas project."," Convert at the rate on the date you paid, note the rate, and be consistent. ",[187,909,910],{"href":324},"Invoicing international clients"," covers the currency and payment side.",[139,913,914,917],{},[131,915,916],{},"Expenses that arrive after final payment."," Bill them promptly on a short-dated invoice rather than sitting on them. A late \"oh, and there's also £200 of expenses\" three months on reads as disorganised and gets queried.",[16,919,920],{},"Recharging expenses well is mostly about being boringly transparent: agree the rules in writing, spend inside the agreed limits, itemise clearly, attach the receipts, and apply the right tax treatment for your jurisdiction. Do that and expenses stop being a source of friction and become just another clean line on the invoice.",{"title":483,"searchDepth":484,"depth":484,"links":922},[923,924,925,926,927,932,933],{"id":522,"depth":487,"text":523},{"id":539,"depth":487,"text":540},{"id":584,"depth":487,"text":585},{"id":613,"depth":487,"text":614},{"id":773,"depth":487,"text":774,"children":928},[929,930,931],{"id":786,"depth":484,"text":787},{"id":828,"depth":484,"text":829},{"id":840,"depth":484,"text":841},{"id":868,"depth":487,"text":869},{"id":882,"depth":487,"text":883},"Invoicing Basics","2026-07-29","How to recharge travel, materials, software and subcontractor costs to clients, whether to add markup, and how VAT and sales-tax rules apply.",{},"\u002Fhow-to-bill-clients-for-expenses",{"title":517,"description":936},{"loc":938},"how-to-bill-clients-for-expenses","RpKUmFUK7kvh-_hOs2fJkgj3NKtNotmV5Fped0xpX-s",{"id":944,"title":945,"author":6,"body":946,"category":934,"date":1444,"dek":502,"description":1445,"extension":504,"featured":505,"meta":1446,"navigation":507,"path":1447,"readingTime":509,"seo":1448,"sitemap":1449,"stem":1450,"__hash__":1451},"content\u002Fwhat-is-progress-billing.md","What Is Progress Billing? How to Invoice a Project in Stages",{"type":8,"value":947,"toc":1434},[948,952,955,958,969,973,976,996,1003,1009,1015,1018,1022,1025,1028,1166,1177,1181,1184,1201,1204,1207,1266,1269,1275,1279,1282,1288,1303,1309,1314,1317,1323,1329,1333,1336,1341,1349,1354,1374,1377,1381,1384,1421,1425,1428,1431],[11,949,951],{"id":950},"getting-paid-before-the-project-ends","Getting paid before the project ends",[16,953,954],{},"A web build quoted at $18,000 takes four months. If you invoice once at the end, you're effectively lending the client the cost of a third of a year's work, absorbing every scope change and stall, and betting your cash flow on a single payment that may arrive 30 days after the final sign-off. That's month five before a dollar lands.",[16,956,957],{},"Progress billing fixes this. Instead of one invoice, you break the project into stages and bill for each as you complete it. The client pays as value is delivered; you fund the work as you go. It's the standard model in construction, engineering, and large creative or software projects, and it scales down neatly to a solo freelancer running a $6,000 branding job.",[16,959,960,961,964,965,968],{},"This is different from a one-off ",[187,962,963],{"href":431},"deposit invoice"," or a fixed monthly ",[187,966,967],{"href":239},"retainer",". A deposit is a single upfront payment. A retainer bills a recurring fee regardless of specific deliverables. Progress billing charges incrementally against measurable chunks of one large project as they're finished.",[11,970,972],{"id":971},"how-progress-billing-actually-works","How progress billing actually works",[16,974,975],{},"Every progress-billed project rests on three decisions you make before you start:",[262,977,978,984,990],{},[139,979,980,983],{},[131,981,982],{},"The total contract value."," The agreed price for the whole job (or a clear rate structure if it's time-and-materials).",[139,985,986,989],{},[131,987,988],{},"The billing triggers."," What event releases each invoice, a calendar date, a completed milestone, or a percentage of work done.",[139,991,992,995],{},[131,993,994],{},"The schedule of values."," A line-by-line breakdown showing how the total is split across stages.",[16,997,998,999,1002],{},"Two broad methods exist for deciding ",[146,1000,1001],{},"when"," to bill:",[16,1004,1005,1008],{},[131,1006,1007],{},"Milestone billing."," You invoice when a defined deliverable is complete: \"homepage design approved,\" \"database migration signed off.\" Best when the work has clear, discrete stages. Clients like it because they're paying for something they can see.",[16,1010,1011,1014],{},[131,1012,1013],{},"Percentage-of-completion billing."," You invoice based on how much of the total work is finished, often assessed monthly. A builder might bill for 40% of a job at the end of month two. This suits long, continuous work where deliverables blur together. It requires an honest, defensible way to estimate \"percent complete,\" which is where disputes usually start.",[16,1016,1017],{},"Most small-business projects use milestones. They're concrete and hard to argue with.",[11,1019,1021],{"id":1020},"building-a-schedule-of-values","Building a schedule of values",[16,1023,1024],{},"The schedule of values is the backbone. It's a table, agreed in the contract, that both parties reference for the life of the project. Keep the number of stages sensible: too few and you're back to lump-sum risk, too many and you drown in admin.",[16,1026,1027],{},"Here's a schedule for that $18,000 website, split into five stages plus a deposit:",[20,1029,1030,1047],{},[23,1031,1032],{},[26,1033,1034,1037,1039,1042,1044],{},[29,1035,1036],{},"Stage",[29,1038,631],{},[29,1040,1041],{},"% of total",[29,1043,640],{},[29,1045,1046],{},"Trigger",[42,1048,1049,1066,1082,1097,1114,1129,1146],{},[26,1050,1051,1054,1057,1060,1063],{},[47,1052,1053],{},"0",[47,1055,1056],{},"Mobilisation deposit",[47,1058,1059],{},"20%",[47,1061,1062],{},"$3,600",[47,1064,1065],{},"On contract signing",[26,1067,1068,1070,1073,1076,1079],{},[47,1069,677],{},[47,1071,1072],{},"Discovery & sitemap approved",[47,1074,1075],{},"15%",[47,1077,1078],{},"$2,700",[47,1080,1081],{},"Client sign-off on IA",[26,1083,1084,1087,1090,1092,1094],{},[47,1085,1086],{},"2",[47,1088,1089],{},"Design mockups approved",[47,1091,1059],{},[47,1093,1062],{},[47,1095,1096],{},"Client sign-off on designs",[26,1098,1099,1102,1105,1108,1111],{},[47,1100,1101],{},"3",[47,1103,1104],{},"Development complete (staging)",[47,1106,1107],{},"25%",[47,1109,1110],{},"$4,500",[47,1112,1113],{},"Site live on staging server",[26,1115,1116,1119,1122,1124,1126],{},[47,1117,1118],{},"4",[47,1120,1121],{},"Testing, revisions, launch",[47,1123,1075],{},[47,1125,1078],{},[47,1127,1128],{},"Site live on production",[26,1130,1131,1134,1137,1140,1143],{},[47,1132,1133],{},"5",[47,1135,1136],{},"Retention release",[47,1138,1139],{},"5%",[47,1141,1142],{},"$900",[47,1144,1145],{},"30 days after launch, no defects",[26,1147,1148,1150,1154,1159,1164],{},[47,1149],{},[47,1151,1152],{},[131,1153,744],{},[47,1155,1156],{},[131,1157,1158],{},"100%",[47,1160,1161],{},[131,1162,1163],{},"$18,000",[47,1165],{},[16,1167,1168,1169,1172,1173,1176],{},"Notice stage 5. That's ",[131,1170,1171],{},"retainage"," (also called retention), a slice of the total held back until after final delivery to guarantee you fix defects. It's ingrained in construction, where 5–10% is typical, and it's increasingly reasonable for larger creative and software work. As the contractor being billed ",[146,1174,1175],{},"against",", you want retainage low and released quickly; as the party doing the work, you accept it because it reassures a nervous client. State the release condition precisely: \"5% retained, payable 30 days after production launch provided no critical defects remain open.\"",[11,1178,1180],{"id":1179},"what-goes-on-each-progress-invoice","What goes on each progress invoice",[16,1182,1183],{},"A progress invoice looks like a normal invoice with a few extra fields that show where this payment sits in the bigger picture. Every one should show:",[136,1185,1186,1189,1192,1195,1198],{},[139,1187,1188],{},"The overall contract value",[139,1190,1191],{},"This stage's amount (the \"current claim\")",[139,1193,1194],{},"Total billed to date, including this invoice",[139,1196,1197],{},"Total remaining after this invoice",[139,1199,1200],{},"Any retainage held",[16,1202,1203],{},"That running tally prevents the most common progress-billing argument: the client losing track of what they've already paid.",[16,1205,1206],{},"Here's how a stage 2 invoice might read:",[172,1208,1209,1215,1256,1263],{},[16,1210,1211,1214],{},[131,1212,1213],{},"Invoice #2026-034","\nProject: Website redesign — Contract value $18,000",[20,1216,1217,1226],{},[23,1218,1219],{},[26,1220,1221,1224],{},[29,1222,1223],{},"Line item",[29,1225,640],{},[42,1227,1228,1236,1244],{},[26,1229,1230,1233],{},[47,1231,1232],{},"Stage 2: Design mockups approved (20% of contract)",[47,1234,1235],{},"$3,600.00",[26,1237,1238,1241],{},[47,1239,1240],{},"Less retainage (5% of this claim)",[47,1242,1243],{},"–$180.00",[26,1245,1246,1251],{},[47,1247,1248],{},[131,1249,1250],{},"Amount due this invoice",[47,1252,1253],{},[131,1254,1255],{},"$3,420.00",[16,1257,1258,1259,1262],{},"Contract value: $18,000.00\nPreviously billed (stages 0–1): $6,300.00\nThis claim: $3,600.00\n",[131,1260,1261],{},"Billed to date: $9,900.00 (55%)","\nRetainage held to date: $495.00\nRemaining to bill: $8,100.00",[16,1264,1265],{},"Payment terms: Net 14. Work on stage 3 begins on receipt.",[16,1267,1268],{},"Whether you deduct retainage from each claim or hold it all in a final stage is a style choice; both are fine as long as the contract and the invoice math agree. Deducting a little from each claim (as above) is cleaner because the client always sees the running retention figure.",[16,1270,1271,1272,1274],{},"Number your invoices in a consistent sequence so the project's billing history is auditable. If you juggle several clients, see ",[187,1273,190],{"href":189}," for a scheme that won't collapse under multiple projects.",[11,1276,1278],{"id":1277},"contract-wording-that-protects-you","Contract wording that protects you",[16,1280,1281],{},"Progress billing lives or dies by what's written before work starts. The schedule of values belongs in the signed contract or statement of work, not buried in an email. Include clauses covering:",[16,1283,1284,1287],{},[131,1285,1286],{},"The trigger definition."," Vague triggers cause disputes. \"Design phase complete\" invites argument; \"Client provides written approval of homepage and two interior page mockups via email or project tool\" does not.",[16,1289,1290,1293,1294,1298,1299,1302],{},[131,1291,1292],{},"Payment terms per stage."," Short terms suit staged work. Net 7 to Net 14 is common; some freelancers use ",[187,1295,1297],{"href":1296},"\u002Fdue-on-receipt-payment-terms","due on receipt"," for deposits and early stages. Whatever you pick, spell out your ",[187,1300,1301],{"href":441},"late fee"," policy too.",[16,1304,1305,1308],{},[131,1306,1307],{},"A stop-work clause."," The single most valuable line in a progress-billing contract:",[172,1310,1311],{},[16,1312,1313],{},"\"Work on the subsequent stage will not commence until payment for the preceding stage has been received in full. Timelines extend automatically by any period of delayed payment.\"",[16,1315,1316],{},"This turns your invoice into a gate. No payment, no progress. It's the natural leverage staged billing gives you, and it beats chasing an $18,000 balance at the end.",[16,1318,1319,1322],{},[131,1320,1321],{},"Scope-change handling."," When the client adds work mid-project, don't quietly absorb it into an existing stage. Issue a change order that adjusts the contract value and, if needed, adds a stage. Revised schedule of values, signed, then carry on.",[16,1324,1325,1328],{},[131,1326,1327],{},"Deposit and retainage terms."," State the deposit amount, whether it's refundable, and how it's applied (usually credited against stage 0 or spread across the first stages). State the retainage percentage and its precise release condition.",[11,1330,1332],{"id":1331},"a-worked-cash-flow-comparison","A worked cash-flow comparison",[16,1334,1335],{},"The point of all this is timing. Same $18,000 project, two approaches:",[16,1337,1338],{},[131,1339,1340],{},"Lump-sum, Net 30, invoiced at completion (month 4):",[136,1342,1343,1346],{},[139,1344,1345],{},"Cash in: $0 until roughly day 150",[139,1347,1348],{},"You self-fund four months of work",[16,1350,1351],{},[131,1352,1353],{},"Progress-billed against the schedule above:",[136,1355,1356,1359,1362,1365,1368,1371],{},[139,1357,1358],{},"Month 0: $3,600 deposit",[139,1360,1361],{},"Month 1: $2,700 (stage 1)",[139,1363,1364],{},"Month 2: $3,420 (stage 2, net of retainage)",[139,1366,1367],{},"Month 3: $4,275 (stage 3, net of retainage)",[139,1369,1370],{},"Month 4: $2,565 (stage 4, net of retainage)",[139,1372,1373],{},"Month 5: $2,340 (stage 5 + accumulated retainage $900)",[16,1375,1376],{},"By the end of month 2 you've collected $9,720 on a project you're only a bit over halfway through delivering. That's the difference between a healthy freelance business and one perpetually one late invoice away from trouble.",[11,1378,1380],{"id":1379},"tax-and-record-keeping-notes","Tax and record-keeping notes",[16,1382,1383],{},"A few things to get right, and rules vary by jurisdiction, so confirm with your tax authority or an accountant:",[136,1385,1386,1406,1412],{},[139,1387,1388,1391,1392,1394,1395,1397,1398,1401,1402,1405],{},[131,1389,1390],{},"When to recognise income and charge sales tax\u002FVAT"," usually depends on when each invoice is issued or paid, not on when the whole project finishes. If you're VAT-registered in the UK, each progress invoice is generally a tax point in its own right; see ",[187,1393,819],{"href":818},". US sales tax on services varies by state, covered in ",[187,1396,836],{"href":835},". Canadian GST\u002FHST has its own ",[187,1399,1400],{"href":847},"invoice requirements",", and Australian ",[187,1403,1404],{"href":852},"tax invoices"," have set fields.",[139,1407,1408,1411],{},[131,1409,1410],{},"Deposits can be treated differently from progress claims"," for tax purposes in some jurisdictions. Don't assume they're the same.",[139,1413,1414,1417,1418,1420],{},[131,1415,1416],{},"Keep every progress invoice, change order, and sign-off email"," for the whole project and beyond. Guidance on ",[187,1419,876],{"href":875}," applies here.",[11,1422,1424],{"id":1423},"when-progress-billing-isnt-worth-it","When progress billing isn't worth it",[16,1426,1427],{},"Skip it for anything short or small. A $900 logo delivered in a week doesn't need five invoices, take a deposit and bill the balance. Progress billing carries admin overhead: more invoices, more approvals, more tracking. The break-even point is roughly a project long enough or large enough that carrying the full cost to completion would strain your cash or your nerves.",[16,1429,1430],{},"It also demands a client who signs a proper contract and approves stages promptly. If sign-offs are the bottleneck, add a clause deeming a stage approved if the client doesn't respond within, say, five business days. Otherwise your carefully staged cash flow stalls on someone else's inbox.",[16,1432,1433],{},"Structure the stages, define the triggers in writing, and let each paid invoice unlock the next slice of work. The project funds itself, and you never carry more risk than the current stage.",{"title":483,"searchDepth":484,"depth":484,"links":1435},[1436,1437,1438,1439,1440,1441,1442,1443],{"id":950,"depth":487,"text":951},{"id":971,"depth":487,"text":972},{"id":1020,"depth":487,"text":1021},{"id":1179,"depth":487,"text":1180},{"id":1277,"depth":487,"text":1278},{"id":1331,"depth":487,"text":1332},{"id":1379,"depth":487,"text":1380},{"id":1423,"depth":487,"text":1424},"2026-07-27","A practical guide to milestone and staged invoicing for freelancers and contractors, covering deposits, progress claims, retainage, and sample wording.",{},"\u002Fwhat-is-progress-billing",{"title":945,"description":1445},{"loc":1447},"what-is-progress-billing","1f7Wj81KqhhKD9NyCFT0w5kd8bObLSynWMtfQE4jWeY",1785314448408]