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Upwork Payroll

Verified hours for U.S.- and Canada-based employees

  • Manage and pay W-2 employees via Upwork
  • Classify workers in compliance with IRS regulations and other applicable laws
  • Comply with ACA requirements

Without increasing overall costs!

Staff better through Upwork

Upwork is the premier place to hire, manage and pay freelancers online. With Upwork Payroll, we now support W-2 classified workers as well:

  • Engage and payroll talent anywhere in the US or Canada
  • Use the Upwork Work Diary to view hours worked
  • Free yourself from the inconvenience of payroll and benefits administration

Businesses that bring their workers to Upwork Payroll save time and money by leveraging Upwork’s time verification and billing functions. Clients typically achieve a 20% to 40% reduction in costs over traditional staffing agencies. With Upwork Payroll, you retain the advantages of payrolling workers through a third-party vendor, while gaining the benefits of working through Upwork--increased productivity, visibility and collaboration.

Staffing agencies traditionally charge 26%+ of your costs to cover fees, payroll and taxes. Compare that to Upwork Payroll, where only 20% is spent on those charges and 80% goes to the employee.

Assume that an employee earns $20 per hour:

Traditional
staffing agency
W-2 through
Upwork Payroll
You pay $27 /hr $25 /hr
Taxes and fees $7 (26%) $5 (20%)
Worker gets $20 $20
Verified work? No Yes

Ensure IRS and ACA (Affordable Care Act) Compliance

With Upwork's staffing agency as the employer of record, you:

  • Reduce or eliminate the risk of fines, penalties and interest accrual due to misclassification of contract workers and failure to offer affordable, minimum-value health care plans to eligible employees
  • Reduce the risk of legal disputes and negative publicity due to mishandling of worker classification and benefits provisioning

Manage ACA Enrollment and Administration

For workers enrolled in Upwork Payroll, Upwork’s staffing firm partner (the employer of record) will manage ACA enrollment and administration on your behalf. This includes:

  • Providing one or more affordable, minimum-value healthcare plans to eligible employees, in full compliance with ACA
  • Monitoring employee eligibility, notifying qualified employees of enrollment options, and collecting the employees’ contribution to monthly premiums
  • Contributing the employer’s contribution to monthly premiums (employer’s contribution to be billed at-cost to Upwork Payroll clients)

Existing Upwork client? Get more value for the same cost

We designed Upwork Payroll so that transitioning workers to W-2 employee status costs you nothing--and impacts the workers minimally--while providing them with the convenience of payroll tax withholding, W-2 tax reporting, and access to federally required healthcare plans.

Assume that your contractor earns $20 per hour:

1099
through Upwork
W-2 with
Upwork Payroll
You pay $25 /hr $25 /hr
Taxes and fees $5
10% Upwork fee and
~10% self-employment tax
$5
20% fee includes
payroll taxes
Worker gets ~ $20 $20
Verified work? Yes Yes

FAQs

Who determines if the worker should be classified as 1099 or W-2?

You will need to determine the worker classification based on the IRS guidelines (located here) and other federal, state and local regulations. Upwork Payroll is only available for workers based in the US and Canada, but local agencies with employees in other countries are also available for hire on Upwork.

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

What is the cost of Upwork Payroll?

What you see is what you pay.

The Upwork fee to you for hiring a worker via Upwork Payroll is less than what you would typically pay a staffing agency. 20% of the rate you pay is divided for fees (10% Upwork + 10% payrolling costs), and the employee receives the remaining 80%. 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.

What additional costs are associated with ACA compliance (the “employer mandate”), and how will those costs be billed?

Additional expenses corresponding to the employer’s contribution to health care premiums will be assessed only for those employees who meet eligibility requirements and elect to enroll in provided health care plan(s). Clients will receive a monthly invoice via the Upwork platform for any employer health plan contributions, and Upwork fees will not apply to these contributions. Complete information regarding the health plan(s) offered to eligible employees and the employer contribution costs will be provided to prospective Upwork Payroll clients prior to finalization of service contracts.

What is the difference between Upwork Payroll and a traditional staffing firm?

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 and payment tools. Upwork Payroll does not manage the workers as some staffing relationships do--you manage your own Upwork Payroll team.

Does Upwork Payroll screen and qualify its workers?

Every Upwork Payroll worker has a profile that, in addition to a resume, generally includes identity verification, work history, feedback from past clients, skills test scores and portfolio. Upwork Payroll does not provide additional vetting information, except that a background check may be conducted by the employer upon request.

Can I bring my own team to Upwork?

Yes! In addition to recruiting talent from our global marketplace, you can also bring your own freelancers and employees 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.

How do I get started?

To use Upwork Payroll for any job, you must sign up and receive verification that employment has started before work begins. Contact us, and we will call you to discuss the program and get you started.