This article explains how sales tax works on Upwork for U.S.-based users, including when and how it’s applied based on your tax residency and address. It also clarifies the difference between standard sales tax and marketplace facilitator sales tax, who pays them, how they appear on invoices, and what to do if you or your client is tax-exempt – AI helped create this summary
Sales tax in the United States is a tax levied by the government on the sale of goods and services within the country. Collection of state and local sales tax varies depending on the state and local jurisdictions where you and your client are located.
Sales tax amount
If we are required to collect sales tax, you will be charged taxes based on the tax residency you entered in your Upwork account’s Tax information. If you have not listed a tax residency, your taxes will be assessed based on the address registered to your account under Account settings (desktop) or Settings (mobile app) > Contact info.
You are 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.
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.