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makhfousdiallo
Community Member

How to pay tax for my income through Upwork

Hello,

I have one question.

When I get my income through Upwork, do I need to pay tax for that?

If yes, I need to pay 30% of the income and need to pay an Upwork fee of 20%.

Does this mean that my NET income will be 50% for each project?

Any help, very thank you

 

4 REPLIES 4
g_vasilevski
Retired Team Member
Retired Team Member

Hi Makhfous,

 

I would suggest reaching out to a local specialist regarding your taxes. Thank you.

~ Goran
Upwork
petra_r
Community Member


Makhfous D wrote:

When I get my income through Upwork, do I need to pay tax for that?


Obviously all income is considered income for tax purposes. Only a tax advisor can tell you how much tax you would be paying depending on where you are and your circumstances.

 


Makhfous D wrote:

If yes, I need to pay 30% of the income


Why 30%?

 


Makhfous D wrote:

...and need to pay an Upwork fee of 20%.


The Upwork fee (of 20% / 10% / 5%) has nothing to do with taxes. Taxes are paid on taxable income, the Upwork fee would come under "business expenses" and are tax deductable.

 


Makhfous D wrote:

Does this mean that my NET income will be 50% for each project?


That's not really how it works, but you best discuss this with your tax advisor.

martina_plaschka
Community Member


Makhfous D wrote:

Hello,

I have one question.

When I get my income through Upwork, do I need to pay tax for that?

If yes, I need to pay 30% of the income and need to pay an Upwork fee of 20%.

Does this mean that my NET income will be 50% for each project?

Any help, very thank you

 


No. Even if you have to pay a flat rate of 30% income tax on your net income, you pay that on net income, so on the 80 that remained after fee (say the contract was 100), so your taxes would be 24, totalling 44% of fees/taxes in relation to gross income. But this exercise if futile. Do you have no cost of running your business, such as a computer, an internet connection, a printer, and so on?

Upwork does not levy taxes.

 

If the community you live in has an income tax rate of 30%, or zero percent, or 60%, or anything else... that is something that comes from your government. Not from Upwork.

 

And Upwork's fees of 20% or 10% or 5% (depending on how much you earned from a given client) are not taxes.

 

I understand the interest in calculating a final "take-home pay." But one can not simply add Upwork's fee to a local tax rate and derive a simple conclusion like "I get to keep 50% of my earnings."

 

The Upwork fee is part of the cost of doing business. It is a percentage fee taken out of money you would not have earned at all if you had not used Upwork to obtain the job. So it really isn't equivalent to a tax.

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