They are paying you for designing a logo. You can enter and participate all contest absolutely FREE. A 10% fee will be deducted from the prize money to help cover administration fees.
When you enter the contest, you can submit lots of entries. And if the contest holder choose your design, then he announce your design as a winner. If you will be winner, you should expect payment within 48 to 72 hours after the client approving the files. New designers that win a contest will have payments held for 30 days. After that payment is released within 24 to 48 hours.