Starting October 1st, Upwork will begin withholding Tax Deducted at Source, TDS, from payments to freelancers and agencies located in India as part of a new tax law enforced by the Indian government.
As part of our continued efforts to remain compliant with tax laws in India, we are asking that our customers in India provide their Income Tax Identification number in the “Tax Info” section under “Settings”. For purposes of TDS withholding, the Indian government will accept either a Permanent Account Number (PAN) or an Aadhaar number. Please be sure to use the correct format for your PAN or Aadhaar number as defined by the Indian government:
For those freelancers and agencies that have provided a PAN or an Aadhaar number:
We are required to withhold 0.75% of all your payments, starting with the first dollar you earn as of October 1, 2020, and forward it to the Indian government. The rate is scheduled to increase to 1% on April 1, 2021.
For those freelancers and agencies that have not provided a PAN or an Aadhaar number:
We will be required to withhold 5% of all your Upwork earnings and forward it to the Indian government. You will be able to claim a tax credit or refund from the Indian government should you pay more taxes than required.
You will need to add a PAN or Aadhaar number in order to keep the withholding tax at .75% of your earnings. Click here to Add Income Tax Identification.
To learn more about Indian TDS, click here.
Let us know if you have any questions.
New rule of withholding TDS for indians is going to start from Oct.1.
So now freelancer earning will be like 20% upwork commission, 0.75% TDS, $1.5/10 connects, $0.99 per withdrawal to local bank, this is so ufair upwork should reduce the commission fee they have imposed, or should provide free monthly connects.
It is totally unfair charging TDS on the amount upwork takes as service charge.
TDS should be charged only on the amount the contractor receive. That is our earing.
Abinadab A wrote:
The dead hand of the tax man.
Yeah. This plus the 10%-20% fees, fees for membership, withdrawals, etc. It's just charges on top of more charges.
Take everything whatever we are earning...
Paid Connects to send Proposals!
and now TDS withholds!
Seems like in near future only paid membership to create an account on Upwork!!
Hi Harsh and others,
Thanks for your feedback. Upwork fees help to cover the costs of acquiring new clients and providing services like payment protection, customer support, and platform infrastructure. Regarding, the tax announced here, we are required to forward any tax we collect from our users to the Indian government.
Freelancers are charged a sliding fee based on their lifetime billings with each client (across all contracts they've ever had with that client's company). Once they have earned $500 with one client their fee will be reduced to 10%. To learn more about our freelancer's fees check out this guide.