*Updated on 10/1/2021
Post edited to reflect additional states where Upwork is required to collect sales tax. This post is intended to notify individuals in these states. We will provide updates here as we approach the collection date.
Starting October 1, 2021, Upwork began collecting sales tax from customers in the following States and districts: District of Columbia, Hawaii, Maryland, New Mexico, South Carolina, South Dakota, Tennessee, or Washington.
For freelancers and clients located in the US, Upwork is now required to collect a sales tax on Upwork services if you live in one of the following states: Connecticut, District of Columbia, Hawaii, Maryland, Massachusetts, New Mexico, New York, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, or Washington*
This will apply to most services including but not limited to Connects, membership fees, and payment processing fees. This DOES NOT apply to the amount charged by freelancers to the client through Upwork.
Here are some examples of how this is calculated:
Freelancer Plus is a monthly subscription for $14.99 (USD). You live in the state of Ohio which has a state sales tax of 5.75% and you have a Plus membership. You will be billed $14.99 + tax (.86 cents) = $15.85 total.
Connects cost $0.15 (USD) each and are sold in bundles of 10, 20, 40, 60, and 80. You want to buy 10 Connects and you live in the state of Connecticut with a 6.35% sales tax. You will be billed $1.50 for the 10 Connects + tax (.10 cents) = $1.60 total.
Services that will include a sales tax:
Client Products and Fees
- Client Membership Fees
- Premium Job Posts
- Payment Processing Fees
- Enterprise Billing Fees
- Enterprise Service Fees
- Enterprise Subscription Fees
- Conversion Fee
Freelancer and Agency Products and Fees
- Membership Fees
- Connect Fees
- Freelancer Service Fees
Because Upwork is an online marketplace, sales tax on Upwork products and services are only applicable in certain states. Currently, these states include: Connecticut, District of Columbia, Hawaii, Maryland, Massachusetts, New Mexico, New York, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, and Washington. We will update customers if additional states require us to collect sales tax or other taxes. All taxes collected by Upwork will be passed on to the state government. To learn more, visit this Help article.
Note:
Collection of sales tax on certain Upwork services began on Sept 1, 2020 for the following states: Connecticut, Massachusetts, New York, Ohio, Pennsylvania, and Texas.
As of October 1, 2021, Upwork is also required to collect sales tax from customers who reside in the following states and districts: District of Columbia, Hawaii, Maryland, New Mexico, South Carolina, South Dakota, Tennessee, and Washington.
