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Upwork removing 5% commission bracket and moving everyone to 10% bracket

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Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#21

Post by szundi »

gamblor956 wrote: post #19
msadowski wrote: post #17

Earlier quoted context omitted.

The 12 pdfs are equally annoying to freelancers. I think what hurts here are how the fees are structured. If I charge client $100, the invoice will show this number. This will also be the income I’ll be reporting to tax authorities, so I have to pay income tax on $100, and an Upwork fee will be automatically deducted. I don’t know if they would have a legal way to do this but I would much rather my invoice showed $90…

The Upwork fee is reported as a business deduction on your tax return. As an independent contractor you pay income taxes based on your self-employment net income (not your gross income, as employees are) because you are effectively treated as a type of business for income tax purposes.

There are almost no forms of tax that are significant in size and based on gross revenues at the same time.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#22

Post by JCharante »

benjaminwootton wrote: post #11
msadowski wrote: post #6

Wow, I thought they would honor the 5% charge till the end of the contracts but it seems they will go to 10% by the end of the year. Since Upwork theoretically locks you in for 2 years with a client, I’m expecting there will be a small exodus of people with long-term projects . I’d much rather sort out invoicing myself and get paid through Stripe than lose out on extra 5%.

The main value add of Upwork for freelancers is helping them to find work in the marketplace. If you can find and bill directly, of course that may be preferable, but finding clients is hard and the business development also has a cost.

What they’re saying is if you have a relationship longer than 2 years then you’ll just go off platform for that relationship

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#23

Post by Rufbdbskrufb473 »

benjaminwootton wrote: post #11
msadowski wrote: post #6

Wow, I thought they would honor the 5% charge till the end of the contracts but it seems they will go to 10% by the end of the year. Since Upwork theoretically locks you in for 2 years with a client, I’m expecting there will be a small exodus of people with long-term projects . I’d much rather sort out invoicing myself and get paid through Stripe than lose out on extra 5%.

The main value add of Upwork for freelancers is helping them to find work in the marketplace. If you can find and bill directly, of course that may be preferable, but finding clients is hard and the business development also has a cost.

What I don't understand is how they keep most freelancers on the platform after finding a client.

I've only used it once, but after having a call with the client, I felt comfortable accepting payment directly in crypto and not paying their fees.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#24

Post by wsc981 »

msadowski wrote: post #6

Wow, I thought they would honor the 5% charge till the end of the contracts but it seems they will go to 10% by the end of the year. Since Upwork theoretically locks you in for 2 years with a client, I’m expecting there will be a small exodus of people with long-term projects . I’d much rather sort out invoicing myself and get paid through Stripe than lose out on extra 5%.

I use Zoho Invoice for invoicing my clients. It’s free and works well imo.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#25

Post by rdl »

szundi wrote: post #21
gamblor956 wrote: post #19

Earlier quoted context omitted.

The Upwork fee is reported as a business deduction on your tax return. As an independent contractor you pay income taxes based on your self-employment net income (not your gross income, as employees are) because you are effectively treated as a type of business for income tax purposes.

There are almost no forms of tax that are significant in size and based on gross revenues at the same time.

Washington State has a B&O tax which, until recently, was the primary state tax. Hawaii has a ~4% gross receipts tax but it can be visibly passed on to customers like a sales tax.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#26

Post by csunbird »

msadowski wrote: post #17
MrThoughtful wrote: post #4

I have been using Upwork for years to outsource tasks. I'm still not sure what to think of them. On the one hand, I keep coming back because I usually find the better freelancers on Upwork than elsewhere. On the other hand, paying them 10% means a freelancer who works for me for two weeks works one whole day just to pay the Upwork fee. And there are other fees on top of that. Upwork's overall take rate is over 15%. A…

The 12 pdfs are equally annoying to freelancers. I think what hurts here are how the fees are structured. If I charge client $100, the invoice will show this number. This will also be the income I’ll be reporting to tax authorities, so I have to pay income tax on $100, and an Upwork fee will be automatically deducted. I don’t know if they would have a legal way to do this but I would much rather my invoice showed $90…

Not a tax advisor, but you probably need to show that you paid Upwork 10$ as commission and get a business expense deduction.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#27

Post by 8organicbits »

msadowski wrote: post #6

Wow, I thought they would honor the 5% charge till the end of the contracts but it seems they will go to 10% by the end of the year. Since Upwork theoretically locks you in for 2 years with a client, I’m expecting there will be a small exodus of people with long-term projects . I’d much rather sort out invoicing myself and get paid through Stripe than lose out on extra 5%.

> locks you in for 2 years with a client

Can you explain?

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#28

Post by sph »

nnurmanov wrote: post #20
sph wrote: post #5

Meh, that's a dishonest title. Yes, Upwork are moving everybody on the 10% fee. But they previously had a progressive fee: * 20% fee for the first $500 earned from a client * 10% fee between $500 and $10,000 earned * 5% fee after the first $10,000 earned Those figures are per client. Start a new job with someone else, you start from the lower bracket again. So they were basically living off short term contracts and l…

I could not find a ClickHouse expert for some project, not sure where to look such people

Not a direct answer but: don't look just for ClickHouse experts. When you hire a plumber, do you only hire experts of that exact brand?

90% of the job I apply for, on Upwork or otherwise, are always looking for an expert in a particular niche technology, and hire only based off that small nugget of information.

I have been doing Elixir full time since 2016, and got a contract with someone that was looking for a Phoenix.Socket expert—a small WebSocket server module part of a larger framework—and the interviewer spent 30 minutes drilling down how much I know that small piece of logic. In this case it's like hiring plumber asking them how much experience they have in square zinc kitchen sinks. Given that I couldn't convey how dumb that is, I had to lie and say that in all of my 7 years with Elixir I have been using Phoenix.Socket pretty much daily. And as expected, it was a bog standard job doing nothing more complicated than an intermediate Phoenix tutorial.

If someone has a lot of experience in databases, and in competitors to ClickHouse they might be good or better than someone that claims to be a world class expert in ClickHouse and nothing else.

(Not to pick on you in particular, but as a true generalist this hiring pattern has been bugging me more and more as my breadth of experience grows.)

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#29

Post by webmobdev »

benjaminwootton wrote: post #13
MrThoughtful wrote: post #4

I have been using Upwork for years to outsource tasks. I'm still not sure what to think of them. On the one hand, I keep coming back because I usually find the better freelancers on Upwork than elsewhere. On the other hand, paying them 10% means a freelancer who works for me for two weeks works one whole day just to pay the Upwork fee. And there are other fees on top of that. Upwork's overall take rate is over 15%. A…

In the UK, if you work through a recruitment agent then they will be taking 10-20% of your rate as a margin. If you work through a consultancy that could be as high 30-50%. If you do your own business development then that is hard work, risky and also expensive. It would take much more than 10% of your time. Though freelancing can be a tough gig, I don’t think Upworks rates are unreasonable considering they have a ma…

A recruitment agent or a consultancy will often give you a personalised one-to-one service, and hence the higher fees can be somewhat justified. Upwork largely provides an automated service. So let's be realistic and not compare the two.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#30

Post by webmobdev »

aerhardt wrote: post #16
benjaminwootton wrote: post #13

Earlier quoted context omitted.

In the UK, if you work through a recruitment agent then they will be taking 10-20% of your rate as a margin. If you work through a consultancy that could be as high 30-50%. If you do your own business development then that is hard work, risky and also expensive. It would take much more than 10% of your time. Though freelancing can be a tough gig, I don’t think Upworks rates are unreasonable considering they have a ma…

> In the UK, if you work through a recruitment agent then they will be taking 10-20% of your rate as a margin. I would still expect a pure software marketplace to be significantly cheaper than a recruitment agency, given economies of scale and other efficiency gains.

It is significantly cheaper and more efficient. The expectation that this benefit would be passed on to us clients is what is unrealistic. :)
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