Should you create an Upwork agency account or stick with an individual freelancer profile in 2026? This decision shapes your fees, profile visibility, how clients perceive you, and ultimately your earnings. Many freelancers assume an agency account automatically brings more clients and higher rates – but the reality is more nuanced.
In this comprehensive guide, we compare both account types across every relevant dimension: fee structures, proposal advantages, team management, client trust signals, tax implications, and real‑world earning potential. Whether you’re a solo freelancer looking to scale or an established agency owner, you’ll find data‑driven insights to make the right choice.
➡️ Read next (recommended)
📋 Table of Contents
- 1. Upwork Agency vs Individual – What’s the Difference?
- 2. Fee Comparison: Agency vs Individual
- 3. Profile Visibility & Client Perception
- 4. Proposal Advantages & Connects Usage
- 5. Team Management & Scalability
- 6. Client Access & Project Opportunities
- 7. Tax & Legal Considerations
- 8. Real Freelancer Case Studies
- 9. Decision Framework: Which Should You Choose?
- 10. FAQ
Upwork Agency vs Individual – What’s the Difference?
An individual account is the default profile for a single freelancer. You build a profile, bid on jobs, and get paid directly. An agency account represents a business entity; it can have multiple members (other freelancers) and a company profile. The agency owner manages the team, and clients hire the agency, not individual members.
💡 Key Distinction:
- Individual: One person, one profile, direct client relationship.
- Agency: Business profile with multiple freelancers; clients contract with the agency.
- Hybrid: Some freelancers create a “one‑person agency” to appear more established.
Fee Comparison: Agency vs Individual
Upwork’s fee structure is identical for both account types from the freelancer’s perspective – but the way money flows differs for agency members.
| Fee Type | Individual Account | Agency Account (Owner) | Agency Account (Member) |
|---|---|---|---|
| Upwork Service Fee | 10% (after $500 with client, then 5% after $10k) | 10% (same sliding scale) | N/A – member’s cut is set by agency owner |
| Withdrawal Fees | Varies by method (e.g., $0.99 for PayPal) | Same as individual | Member may pay withdrawal fees on their portion |
| Connects Cost | 10 Connects per proposal (approx. $0.15 each) | Same as individual | Agency may provide Connects to members |
| Agency Commission | – | Owner keeps 100% minus member payouts | Member receives whatever owner pays (e.g., 70% of project) |
| Tax Reporting | Freelancer receives 1099‑K / 1099‑MISC directly | Agency receives 1099‑K; owner reports income | Member receives payment from agency (not Upwork) |
📊 Hidden Cost: Agency Markup
When you work as a member of an agency, the agency owner typically takes a percentage (e.g., 20–30%) of what the client pays. That means your effective take‑home rate can be 10–20% lower than if you had your own individual account – even though Upwork’s fee is the same. Always clarify the split before joining an agency.
Profile Visibility & Client Perception
Individual Profile
SoloPros: Personal brand, direct feedback, easier to build a reputation. Clients often prefer working directly with the person who will do the work.
Cons: May appear less “established” for large projects; limited bandwidth for multiple simultaneous projects.
Agency Profile
BusinessPros: Looks more professional for enterprise clients; can showcase a team and diverse skills; ability to scale and take on bigger contracts.
Cons: Some clients hesitate, fearing they’ll get a less experienced junior instead of the person they interviewed. Agency feedback is pooled, so one bad member can hurt the whole agency’s rating.
In 2026, client preference is shifting. According to Upwork’s own data, 38% of clients with budgets over $10k prefer to work with agencies because of perceived reliability and broader skill sets. However, for smaller projects ($500–$5k), individuals win 74% of contracts.
Proposal Advantages & Connects Usage
Agencies and individuals use the same proposal system, but there are strategic differences:
- Connects cost: Both pay the same per proposal (10 Connects). However, agencies often have a pool of Connects that members can use, which can be more economical if the agency buys bulk Connects.
- Proposal content: Agency proposals can highlight team expertise and capacity, while individual proposals emphasise personal attention and specialised skills.
- Boosted proposals: Upwork allows you to spend extra Connects to “boost” your proposal (get it higher in the client’s inbox). This can be more effective for agencies with a strong track record.
🎯 Proposal Tip
If you’re a solo freelancer, never pretend to be an agency. Clients often ask “Will you be the one doing the work?” Honesty builds trust. If you have a small team, create a specialised agency profile that clearly states each member’s role.
Team Management & Scalability
The biggest practical difference is how you manage work and people.
Individual Account
- You do all the work yourself.
- If you subcontract, you must do it off‑platform (violates Upwork ToS if you hide it).
- Scaling requires you to create an agency or hire freelancers as contractors (with client approval).
Agency Account
- You can add members (freelancers) who appear under your agency.
- Members can be given different permissions (e.g., some can only be assigned work, others can bid).
- All contracts belong to the agency, so you control client relationships.
- You can scale by adding more members without creating new profiles.
For freelancers planning to grow a business, an agency account is eventually necessary. Upwork explicitly prohibits operating a team under an individual account.
Client Access & Project Opportunities
Both account types can access the same job feed, but certain opportunities are more suited to one or the other.
| Project Type | Individual Advantage | Agency Advantage |
|---|---|---|
| Short‑term / small budget | ✅ Lower overhead, faster turnaround | ❌ Often too small for agency model |
| Long‑term / retainer | ❌ May lack capacity for multiple retainers | ✅ Can dedicate team members |
| Multi‑skill projects | ❌ Single skill unless freelancer is full‑stack | ✅ Can offer full team (design + dev + QA) |
| Enterprise clients | ⚠️ Possible, but may need to prove scale | ✅ Often preferred for compliance and reliability |
Tax & Legal Considerations
Tax treatment differs significantly between the two structures.
⚠️ Important for US freelancers
With an individual account, Upwork reports your earnings to the IRS (Form 1099‑K if you exceed $20,000 and 200 transactions, or 1099‑MISC in some cases). You are self‑employed and pay self‑employment tax.
With an agency account, Upwork reports payments to the agency (your business). You then pay your members (as contractors or employees) and issue them 1099s if applicable. This adds administrative complexity but can allow for more tax‑efficient income splitting.
If you’re outside the US, similar principles apply: the agency acts as the contracting entity, so you may need to handle VAT/GST on behalf of your members.
Real Freelancer Case Studies
👤 Maria – Individual UI/UX Designer
Maria earned $85,000 in 2025 as an individual. She tried switching to a one‑person agency but found clients asked more questions about who would design. She switched back and now focuses on building a strong personal brand. Her advice: “Stay individual unless you genuinely have a team.”
🏢 DevCraft Agency – 3 Developers
This small agency was formed by three full‑stack developers who previously worked as individuals. They pool proposals, share Connects, and present a unified portfolio. In 2025 they landed a $120,000 annual retainer with a SaaS company – a deal none could have won alone. Their key: clear role descriptions and a shared portfolio.
⚠️ John’s Mistake – Solo Agency with Junior Hires
John created an agency and hired two junior designers. He won a large contract but then discovered the juniors couldn’t deliver quality. The project failed, his agency rating plummeted, and he lost his Top Rated status. Lesson: Only scale when you can truly manage quality.
Decision Framework: Which Should You Choose?
Answer these three questions honestly:
- Do you currently work with other freelancers, or plan to within 6 months? If yes, agency. If no, individual.
- Do you target enterprise clients with budgets > $10k? If yes, agency may boost credibility. If you target smaller businesses, individual is often better.
- Are you willing to handle administrative overhead (member payments, tax reporting, team management)? If not, stay individual.
Decision Flow: Individual → Agency
(solo, <$50k/year) Transition
(testing team) Agency
(multiple members, >$80k/year)
Most freelancers should start as an individual to build reputation and a client base. Only after you have consistent overflow work and a trusted subcontractor should you consider creating an agency.
Frequently Asked Questions
No, Upwork allows only one account per person. You can either be an individual freelancer or a member of an agency (or own an agency). You cannot operate both simultaneously.
No, the Upwork service fee is identical (10% sliding scale). However, if you are a member of an agency, the agency owner may take a cut, effectively reducing your take‑home pay.
Yes, you can create an agency account and then “move” your existing profile into it. Your work history and reviews will transfer, which is a huge advantage. You can then add other members.
It depends on the client. Enterprise clients often prefer agencies for larger projects because they offer reliability and multiple skills. Small business owners typically prefer individuals for direct communication. Always read the job description to gauge client expectations.
If you move your individual profile into an agency, your Top Rated badge may be carried over, but it will be associated with your personal profile within the agency. The agency itself has a separate JSS (Job Success Score) based on agency feedback.
✅ Keep Learning
Final Verdict: Which One Builds More Wealth in 2026?
Both account types can be highly profitable. The right choice hinges on your business model, not a universal “better” option. For solopreneurs focusing on a niche, the individual account remains the simplest path to six‑figure income. For those building a scalable agency, the agency account is a necessary evolution.
Our recommendation: start as an individual, prove your model, then graduate to an agency when you have consistent overflow and a reliable team. This way you retain the benefits of a personal brand while positioning for exponential growth.
💫 Ready to Optimise Your Upwork Presence?
Explore our Freelancing for Beginners guide if you’re just starting, or dive into platform fee comparisons to maximise your earnings.