I've been charged 24% service fee instead of 20%, how do I fix this?

[nickyscordellis]

Hi, I've received my first payment from a client, of $146.44, and the service fee is showing up as $35.15, which is 24% of $146.44, i.e. greater than the 20% fee set out in the service fees information.

Can someone please explain to me why this has happened or how I can have it corrected it if it is an error?

Please see the attached image of my payments screen if this is helpful.

Thank you,

Nicola

[VladimirG]

Hi Nicola,

I can confirm the 20% service fee was applied to the payment your client issued. In addition, the VAT charge was also assessed on the service fee Upwork charged since you haven't entered a VAT number, which is the difference you're seeing in total fees. The VAT fee will be remitted to your government and you can read more about this charge in this Help article. You can find the details about this charge by going to Reports > Transaction History.

[nickyscordellis]

Hi Vladimir,

Thanks for this response, very quick and clear 🙂 

I've had a look at the help article, but I still have one question:

Given that in the UK I am VAT-exempt because I'm well below the income threshold, can I put in my Unique Taxpayer Reference number in place of the VAT number and thus avoid getting charged VAT?

Thank you again!

Nicola

[VladimirG]

Hi Nicola,

Please note that VAT is not being charged on your earnings from your clients but on the services Upwork provides to you, which include the service fee you pay to Upwork, purchasing additional Connects and subscribing to a paid membership plan.

[bae91040]

I've never purchased connects and I don't have a membership plan still Upwork removes around 24+% from earnings I get from clients...

[AleksandarD]

Hi Samuel,

Upwork's pricing structure is a sliding scale, based on your lifetime billings with each client (across all hourly and fixed-price contracts you've ever had with them on Upwork). The more business you do with a client, the lower the fee you will pay.

• $0-$500: 20%
• $500.01-$10,000: 10%
• $10,000.01 or more: 5%

For more information, you can check this help article.

Additionally, apart from being applied to premium Upwork membership and purchased of Connects, VAT is being applied to the Upwork service fees which is the reason why you see the additional charges.

Thank you.