Upwork Payroll

You will need to determine the worker classification based on the applicable law—which varies based on where you and the worker are and what laws apply to you and the worker. A starting point for U.S. workers is the following chart, which lays out some of the basic differences between employees and independent contractors:
‍

Independent Contractor vs. Employee

*General factors for U.S. workers, which can vary based on engagement details, location, and applicable laws

Independent Contractor

• 1. Contracted for specific project or time period
• 2. Decides when and where to work
• 3. Determines how to do work, process steps, and what tools are utilized
• 4. Does not need or receive skills training
• 5. Does not attend frequent meetings or give regular reports
• 6. Performs work requiring specialized skills that is not the client’s primary service
• 7. Negotiates and sets own rates, including fixed price amounts
• 8. Provides own tools and equipment, is responsible for own costs and expenses, and bears risk of loss
• 9. Markets services to public on Upwork or otherwise and works with multiple clients
• 10. May delegate tasks to others
  

Employee

• 1. Works on ongoing basis and may be terminated at will
• 2. Has required work schedule and location
• 3. Is told how to perform work, in what order, and particular tools to use
• 4. May be trained and instructed
• 5. May attend frequent meetings and give regular reports
• 6. May perform work that is a business’ primary service
• 7. Paid hourly wage or salary governed by minimum wage and overtime laws
• 8. Reimbursed for all expenses needed for work
• 9. May work full-time and exclusively
• 10. Must personally perform their work
  

The IRS guidelines (located here) are also a good resource, as will be federal, state, and local agencies that are responsible for employees, like the U.S. Department of Labor or the New York State Department of Labor.

Please review and discuss your workers’ classification status with them to ensure proper classification and prevent confusion.

The cost of hiring a worker through Upwork Payroll is less than what you would typically pay a staffing agency. 23% of the rate you pay is divided for fees (10% Upwork + 13% payrolling costs), and the employee receives the remaining 77%. This does not include any payment processing fees that may apply. The payrolling costs are comparable to what the employee would pay in self-employment taxes as an independent contractor, so the net after-tax impact to the employee is negligible in most cases.

With Upwork payroll, you receive the payroll and IRS/ACA compliance benefits of working with a staffing firm, combined with the productivity and accountability of Upwork’s high visibility communication tools. Upwork Payroll does not find, recommend, or manage the workers as some staffing firms do. You find and select your own workers and invite them to join the Upwork Payroll program, where you work with them directly.

Every independent professional on Upwork has a profile that, in addition to work history, generally includes identity verification, feedback from past clients, skills test scores and portfolio. Clients can review this information and conduct interviews before inviting the worker to onboard as an employee of Upwork’s partner Staffing Provider. Upwork Payroll does not provide additional vetting. However, a background check may be conducted by the Staffing Provider upon request.

Yes! In addition to finding top talent on our global marketplace, you can also bring your own workers to Upwork. If you are transitioning a large team to the Upwork platform simultaneously, we are happy to help with the logistics. The entire implementation typically takes less than a week.