Upwork does charge Goods and Services Tax (GST) (typically 18% in India, or similar local taxes elsewhere) on its service fees, such as membership fees, connects purchases, and freelancer service fees, if you are located in a region where they are required to collect it. However, this tax is not applied to the actual payments made to freelancers, and providing a valid GSTIN/tax ID can exempt you from these charges.
It's 18% of the cost of the service being taxed.
Like any other service provider, freelancers are also subject to provisions of GST. Usually, a GST of 18% applies to the services provided by freelancers. If you are a registered freelancer, collecting GST from the service recipients and depositing it with the government can cause cash flow issues.
Even if you make less than $30,000 in income in subsequent years after charging GST/HST, you must continue to charge GST/HST on your invoices to clients and remit payments to the CRA.
In some locations in the U.S., sales tax also applies to digital services or purchases, such as fees you pay Upwork for services or Connects purchases. Collection of state and local sales tax varies depending on the state and local jurisdictions where you and your client are located.
We understand that you may not be required to register for GST for the purposes of your freelance business. However, to comply with Australian laws, Upwork has to collect GST on the services we provide.
Upwork is charging you up to 15% because they switched to a variable service fee for new contracts starting May 1, 2025, replacing the old 10% model, with the fee determined by factors like market demand, job complexity, and membership, aiming for a balanced marketplace but often resulting in higher fees for competitive niches like web development where supply is high. You see this fee on new offers and proposals, ensuring transparency before you accept, with the fee fixed once a contract starts.
If your GST turnover is below the $75,000 threshold, you may choose to register. But if you do, regardless of your turnover, you must: include GST in the price of most goods and services you sell. claim GST credits for most business purchases you make.
If you earn 75,000 AUD or more in a 12-month period from your freelance work, you're required to register for GST. Once you're registered, you'll add 10% GST to your invoices, lodge business activity statements (BAS), and pass that collected GST to the ATO. You can also claim GST credits on eligible business purchases.
Who is liable to pay GST under the proposed GST regime? Under the GST regime, tax is payable by the taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person crosses the turnover threshold of Rs. 20 lakhs (Rs.
Go to the "Billing & Invoicing" section of your Upwork account. Click on the "Create Invoice" button. Select "Indian GST" as the invoice type. Enter the details of your GST registration, including your GSTIN (GST Identification Number) and PAN (Permanent Account Number).
When services are used outside Australia. The supply of service is GST-free if the supply is used or enjoyed outside Australia or the supply is made to a non-resident who is not in Australia when the supply is made.
But persons who are engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax or an agriculturist, to the extent of supply of produce out of cultivation of land are not liable to register under GST.
Under GST law, freelancers in India must register for GST if their turnover exceeds Rs. 20 lakh (Rs. 10 lakh for special category states). Freelancers offering services to overseas clients must also comply with GST on exporting services, even if they do not cross the turnover limit.
When you find a freelancer through Upwork, our Terms of Service require you to keep all work and payments on Upwork for the first two years. This helps protect both clients and freelancers and supports a trusted marketplace experience.
The U.S. operates on a pay-as-you-go tax system. This means, when you freelance on Upwork, you'll need to pay estimated taxes on the income you earn throughout the year. By paying taxes quarterly, you'll be able to avoid a large tax bill at the end of the year.
You have to start charging the GST/HST on your date of registration, including on the sale that made you exceed the $30,000 threshold.
You must register for GST when your business has a GST turnover (gross income minus GST) of $75,000 or more. This is known as the 'GST threshold'. There are a few additional factors to be aware of regarding the GST threshold. For full details, please see the relevant page of the ATO website.
GST payment is to be made when the GSTR 3 is filed i.e by 20th of the next month.
Small businesses in Australia who turn over less than $75,000 per year don't have to pay GST. If you're a registered not-for-profit, you also don't have to pay GST as long as your turnover is less than $150,000. If you run a taxi service or are an uber driver, for example, you must always pay GST, regardless of income.
An offender not paying tax or making short payments must pay a penalty of 10% of the tax amount due subject to a minimum of Rs. 10,000. Consider — in case tax has not been paid or a short payment is made, a minimum penalty of Rs 10,000 has to be paid. The maximum penalty is 10% of the tax unpaid.
The main benefit of being GST registered is that you can claim back GST on your business expenses. If you pay more in GST when buying supplies for your business than you charge your clients, you are eligible for a GST refund.
Upwork's advantage over Fiverr is its significantly lower commission rate, which is half the cost. Additionally, Upwork stands out with corporate clients and higher freelancing earning potential.
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