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How do I pay a freelancer for expenses they incurred on my behalf?

ab3e1e22
Active Member
Eric B Member Since: Dec 27, 2016
1 of 11

I saw some instructions about using a Bonus but that's unfair because Upwork will take a cut and expenses should be paid straight thru.  Please advise.

 

Thanks,

Eric

 

mtngigi
Community Guru
Virginia F Member Since: Feb 15, 2016
BEST ANSWER
2 of 11

Terms of service require that all payments to freelancers go through Upwork, including bonuses and expenses. You could add the percentage to the bonus so that the expense is completely covered.

View solution in original post

prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
3 of 11

Eric:

I know that this may seem "unfair" at first glance, but this is the only way to do it.

 

There is no way for Upwork to allow some expenses (such as reimbursements and bonuses) to NOT be charged a fee. Because there would be no way for Upwork to prevent clients from simply paying their freelancers using those no-fee methods instead of through the expected methods that incur fees.

 

I know you would not do this, but some dishonest clients and freelancers would do that. So those people are the reason for this policy.


One thing you can do to prevent Upwork from taking a cut when there are expenses such as licensed content that needs to be purchased... is for you to purchase those items directly (yourself), and send the files or materials to the freelancers.

ab3e1e22
Active Member
Eric B Member Since: Dec 27, 2016
4 of 11

 In my case, these are travel expenses and it's not cool legally to purchase travel and the like for contractors in the US or they begin to seem like employees to our goverment.

 

 

Just because this might be challenging to implement doesn't mean it can't be done.   Lots of online/internet-based payment systems have fraud detection and the like.

 

Upwork could require receipts and do OCR on them, etc,   Manually audit some of them on occasion.  Etc.  Large companies have the same problem with their own employees.  They have to figure it out.

 

It's not impossible.  Especially for your enterprise customers who should be easier to audit, I'd hope.

 

Consider this a serious feature request or let me know where to file one.

 

 

 

 

 

prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
5 of 11

Eric:

These are great suggestions.

 

The Community Forum is absolutely the right place to suggest these ideas.

 

These things can take time. But many changes at Upwork have arisen from serious discussions of ways that things can be improved.

james-tenser
Active Member
James T Member Since: Mar 8, 2018
6 of 11

Please fix this pronto, Upwork team!

I believe you are treading on thin ice with the IRS if you continue to fail to provide a legitimate, verifiable mechanism for processing properly documented expense reports. Make it iron-clad, so dishonest clients and contractors are unable to rip you off.

I'm new here, but just began a negotiation regarding a multi-month engagement with a remote client. I was frankly stunned when I enquired about how travel expenses would be handled, and learned of Upwork's "policy". 

This is not really a policy, it's wallpaper over a yawning gap in your system, that fails to consider a very real and legitimate business practice. Near as I can tell, you don't even provide a mechanism for sharing expense documentation, which means your clients and contractors would have to communicate directly, outside your platform. Isn't that asking for trouble?

I implore you to roll this discussion up to your top management, Your entire business model depends upon it. What would your venture backers think?  What would the IRS think?

JAT

kochubei_valeria
Community Manager
Valeria K Community Manager Member Since: Mar 6, 2014
7 of 11

James,

 

Thank you for sharing your feedback. Currently, Upwork Service Fee is applied to all payments made through the platform including bonuses and expense reimbursements and I'm not aware of any immediate plans to change that. As Preston and Virginia pointed out changing the present system will open it up for abuse.

 

Please, note that both the freelancer and the client will be able to access an invoice for the expense reimbursements in their Transaction History and can use it for reporting.

~ Valeria
Upwork
mtngigi
Community Guru
Virginia F Member Since: Feb 15, 2016
8 of 11
@James T wrote:

Please fix this pronto, Upwork team!

I believe you are treading on thin ice with the IRS if you continue to fail to provide a legitimate, verifiable mechanism for processing properly documented expense reports. Make it iron-clad, so dishonest clients and contractors are unable to rip you off.

I'm new here, but just began a negotiation regarding a multi-month engagement with a remote client. I was frankly stunned when I enquired about how travel expenses would be handled, and learned of Upwork's "policy". 

This is not really a policy, it's wallpaper over a yawning gap in your system, that fails to consider a very real and legitimate business practice. Near as I can tell, you don't even provide a mechanism for sharing expense documentation, which means your clients and contractors would have to communicate directly, outside your platform. Isn't that asking for trouble?

I implore you to roll this discussion up to your top management, Your entire business model depends upon it. What would your venture backers think?  What would the IRS think?

JAT

As an independent contractor, I am solely responsible for tracking and reporting any expenses I incur in the course of my freelance jobs. Expenses of any kind should be considered and included by the freelancer in their bids. Travel expenses are not something I've had to consider, but if they were, I'm assuming they could be treated the same way as any other expense and included in the overall bid to the client.

 

How we report earnings and expenses to the IRS is our responsibility and nothing clients ever have to know about or address. Apologies if I'm completely misunderstanding your post.

bobafett999
Community Guru
Prashant P Member Since: Sep 29, 2015
9 of 11

@Eric B wrote:

I saw some instructions about using a Bonus but that's unfair because Upwork will take a cut and expenses should be paid straight thru.  Please advise.

 

Thanks,

Eric

 


 Well if you want to be fair to the freelancer and not violate Upwork rules, you can increase the bonus amount by 20%.

bobafett999
Community Guru
Prashant P Member Since: Sep 29, 2015
10 of 11

@Eric B wrote:

I saw some instructions about using a Bonus but that's unfair because Upwork will take a cut and expenses should be paid straight thru.  Please advise.


 Well if you want to be fair to the freelancer and not violate Upwork rules, you can increase the bonus amount by 20%.