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Does UpWork Collect Sales Tax?

Last updated on September 30, 2022 @ 10:37 am

UpWork is a popular online marketplace that allows businesses to connect with freelancers for various projects. Many businesses use UpWork to find qualified individuals to complete tasks such as web design, marketing, customer service, and more.

While UpWork is a great resource for businesses, it’s important to note that the platform does not collect sales tax on behalf of its users. This means that if your business hires a freelancer through UpWork, you may be responsible for paying any applicable taxes on the services rendered.

PRO TIP: If you are an Upwork user, be aware that the company may collect sales tax from you in certain circumstances. This is most likely to occur if you are using Upwork to sell products or services, or if you are based in a state where Upwork has a physical presence. If you are unsure whether or not sales tax will be collected from you, we recommend that you contact Upwork customer support for more information.

Fortunately, there are a few steps you can take to ensure that you’re properly paying any taxes owed on services obtained through UpWork. First, be sure to check the laws in your state or country to see if you’re required to pay sales tax on services purchased online. If so, you’ll need to set up a system for collecting and remitting the tax to the appropriate authorities.

Next, make sure that you’re only hiring freelancers who are based in countries where you’re not required to pay sales tax. For example, if you’re based in the United States, you won’t need to pay taxes on services provided by freelancers based in Canada or Mexico. However, if the freelancer is based in another country (such as the United Kingdom), you may be responsible for paying taxes on their services.

Finally, be sure to keep good records of all of the services purchased through UpWork so that you can easily calculate and remit any taxes owed. By taking these steps, you can ensure that your business is compliant with all applicable laws and regulations.

Morgan Bash

Morgan Bash

Technology enthusiast and Co-Founder of Women Coders SF.