U.S. sales tax on Upwork explained, including how rates are determined, how charges appear, and how to check taxes by location.
In this article
- What is U.S. sales tax on Upwork?
- What is the U.S. sales tax rate, and how is it determined?
- How can I see how much tax I’m being charged?
- How can I find out how much sales tax I'll have to pay based on my location in the U.S.?
Disclaimer:
Upwork cannot provide legal or tax advice. This article is for general information only and may not reflect recent changes. We encourage you to consult with a qualified tax advisor for questions about your specific tax obligations.
What is U.S. sales tax on Upwork?
Sales tax in the United States is a tax levied by the government on the sale of goods and services within the country. 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.
What is the U.S. sales tax rate, and how is it determined?
If sales tax is required, the amount you'll pay depends on the rates for your state or local jurisdiction, such as county or city, for example. These vary across the country and may change at any time based on state or local tax law changes.
You'll be charged based on the tax residency you entered in your Upwork account’s tax information. If you haven't listed a tax residency yet, taxes will be assessed based on the address registered to your account under Account settings (desktop) or Settings (mobile app) > Contact info.
Note:
You're required to keep your address and tax residency current, even if you move temporarily. Unexpected tax-related activity may occur if your tax residency setting is not up-to-date. We recommend you regularly review and update the tax information in your account.
How can I see how much tax I’m being charged?
- When you’re making a purchase, such as Connects or a membership plan, you’ll see an estimated tax during checkout
- Final taxes are assessed at the time of payment, not at contract creation, so the final cost may differ from the estimate. This is especially important for recurring charges like memberships
- You’ll see the tax you were charged listed as a separate line item on your invoices and in your transactions
How can I find out how much sales tax I'll have to pay based on my location in the U.S.?
We recommend referring to your state’s, county’s, and municipality’s tax websites or a tax consultant to find your location's taxes and rates. We can’t list them for all U.S. cities, counties, and states here, since there are so many and tax laws change frequently. To ensure accurate tax collection, we work with a third-party tax partner to monitor and apply any changes across all jurisdictions where we operate.
A note about marketplace facilitator sales tax
We also collect marketplace facilitator sales tax in states where it is required, and your client will pay this tax. Learn more about the taxes your U.S.-based client may pay here.