No. Upwork does not take out taxes from your earnings. The platform treats you as an independent contractor, which means income tax, Social Security, and Medicare are not withheld from the money you receive. You calculate what you owe, set it aside yourself, and pay the IRS directly. If your net self-employment earnings top $400 for the year, you have to file a federal return and pay self-employment tax on them.1Internal Revenue Service. Check if You Need to File a Tax Return
The one situation where Upwork will deduct money for the IRS is backup withholding, covered further down.
Why Nothing Comes Out of Your Payments
Withholding is something employers do for W-2 employees. On Upwork you set your own rates, pick your clients, and control when and how you work, and the platform doesn’t supervise your methods. Under federal tax law that makes you self-employed, not an employee, so no payroll department is deducting anything on your behalf.2Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Full responsibility for tracking income, making tax payments, and filing the right forms sits with you.
What You Actually Owe
Two federal taxes apply to your Upwork income: regular income tax at your usual bracket, and self-employment tax on top of it.
Self-employment tax covers Social Security and Medicare. In a traditional job, you and your employer split these contributions. Without an employer, you pay both halves. The combined rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare.2Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
The 12.4% Social Security portion only applies to net earnings up to $184,500 in 2026.3Social Security Administration. Contribution and Benefit Base Earnings above that cap are still subject to the 2.9% Medicare portion. If your net self-employment income exceeds $200,000, or $250,000 for married couples filing jointly, an additional 0.9% Medicare surtax applies to the amount over that threshold.
You calculate the tax on Schedule SE and attach it to your Form 1040. One built-in break: you can deduct half of your self-employment tax on Schedule 1, which reduces the income that regular income tax applies to.4Internal Revenue Service. Topic No. 554, Self-Employment Tax
Paying Throughout the Year
The IRS expects taxes to be paid as you earn, not in a lump sum in April. For self-employed workers that means quarterly estimated payments using Form 1040-ES. The four deadlines:5Internal Revenue Service. Pay As You Go, So You Won’t Owe: A Guide to Withholding, Estimated Taxes and Ways to Avoid the Estimated Tax Penalty
- April 15 for income earned January through March
- June 15 for income earned April through May
- September 15 for income earned June through August
- January 15 of the following year for income earned September through December
If a deadline falls on a weekend or federal holiday, the payment is due the next business day.
You can generally avoid the underpayment penalty if your total payments during the year cover at least 90% of your current-year tax liability or 100% of what you owed the prior year, whichever is less.6Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty Miss that safe harbor and the IRS charges a penalty based on the underpayment amount, how long it stayed unpaid, and the quarterly interest rate for underpayments. Separate from that, the failure-to-pay penalty is 0.5% of your unpaid balance per month, up to 25%, if you don’t pay in full by your filing deadline.7Internal Revenue Service. Failure to Pay Penalty
A common rule of thumb is to move 25% to 30% of your gross Upwork earnings into a separate account as they come in. The right percentage depends on your bracket, your deductions, and your state’s tax rules.
What Upwork Reports to the IRS
Upwork reports your earnings on Form 1099-K, which covers payments processed through third-party platforms. You will receive one if your gross payments through Upwork exceed $20,000 and you have more than 200 transactions in a calendar year.8Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill; Dollar Limit Reverts to $20,000
The 1099-K shows the gross amount of all payments. It does not subtract Upwork’s service fees, refunds, or other adjustments.9Internal Revenue Service. Form 1099-K FAQs: General Information The number will almost always be higher than what actually hit your bank account. You can deduct those fees as business expenses when you report income, but you need to track them carefully so the IRS can see why your reported income differs from the 1099-K total.
Getting no form doesn’t mean the income is tax-free. All of your Upwork income is reportable whether or not Upwork sends you a 1099-K,10Internal Revenue Service. Taxable Income and the $400 filing threshold for self-employment tax applies either way.
Tax Forms Upwork Asks You to Complete
U.S. Freelancers: Form W-9
When you set up an Upwork account in the United States, the platform asks you to complete a Form W-9. This form collects your legal name and taxpayer identification number, typically your Social Security Number or, if you operate as a business entity, your Employer Identification Number.11Internal Revenue Service. Form W-9, Request for Taxpayer Identification Number and Certification Upwork uses that information to prepare your 1099-K and meet federal reporting requirements. Make sure the name and TIN match exactly. A mismatch can trigger backup withholding or hold up your payments.
International Freelancers: Form W-8BEN
If you live and work outside the United States, Upwork requires Form W-8BEN for individuals or Form W-8BEN-E for business entities. These certify your foreign status and let you claim a reduced withholding rate under any applicable tax treaty between your country and the U.S.12Internal Revenue Service. About Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) Both are available in the tax information section of your account settings.
When Upwork Does Withhold: 24% Backup Withholding
If you fail to provide a valid taxpayer identification number, or if the IRS notifies Upwork that the TIN you provided is incorrect, the platform must apply backup withholding at 24% on all your payments.13Office of the Law Revision Counsel. 26 USC 3406 – Backup Withholding It is a mandatory deduction sent directly to the IRS, not a voluntary hold or an estimate. Withholding continues until you fix the issue with valid tax documentation. You can claim the withheld amount as a credit when you file, but the money is unavailable to you in the meantime.
Deductions That Lower What You Owe
Because you are self-employed, ordinary and necessary business expenses go on Schedule C and reduce the income subject to both income tax and self-employment tax. The deductions Upwork freelancers use most:
- Upwork service fees. The percentage Upwork charges on each contract is a cost of doing business. Deducting it also helps reconcile your reported income against the higher gross figure on the 1099-K.
- Home office. If a dedicated area of your home is used exclusively and regularly for freelance work, a portion of rent or mortgage interest, utilities, insurance, and maintenance is deductible. The IRS also offers a simplified method: $5 per square foot of home office space, up to 300 square feet, for a maximum of $1,500.14Internal Revenue Service. Topic No. 509, Business Use of Home
- Equipment and software. Computers, monitors, keyboards, software subscriptions, and other tools used for your work are deductible. Mixed-use items only qualify for the business-use portion.
- Internet and phone. Deduct the business-use percentage. If your home internet is 60% work, deduct 60%.
- Health insurance premiums. If you have a net profit from self-employment and aren’t eligible for coverage through a spouse’s employer plan, premiums you pay for medical, dental, and vision insurance for yourself, your spouse, and your dependents are deductible. This one goes on Schedule 1, not Schedule C.15Internal Revenue Service. Instructions for Form 7206, Self-Employed Health Insurance Deduction
- Half of your self-employment tax, deducted on Schedule 1.4Internal Revenue Service. Topic No. 554, Self-Employment Tax
Keep receipts and invoices for every expense you claim. Documentation is your best protection if the IRS questions your return.
State Income Tax
Federal taxes are only part of the bill. Most states with an income tax require you to report self-employment income and pay state tax on it. A few states have no income tax; the rest have varying rates and thresholds, and some require quarterly estimated payments on their own schedule.
Because your work is remote, your state obligation is generally tied to where you live and physically perform the work, not where the client is located. If you move states mid-year, expect to file part-year returns in both. Check your state’s department of revenue for the specific rules that apply to self-employed filers.
If You Work Outside the United States
International freelancers face a different mix. Upwork collects value-added tax, goods and services tax, or similar indirect taxes on its service fees in many countries, including across the European Union and the United Kingdom.16Upwork Customer Service and Support. Tax Information for Freelancers Those taxes apply to what Upwork charges you to use the platform, not to your total earnings. Rates depend on your country.
Filing a valid W-8BEN keeps 24% backup withholding off your U.S.-sourced Upwork payments. Beyond U.S. requirements, you are generally responsible for reporting Upwork income under your home country’s tax laws, and many countries require reporting of worldwide income. A local tax authority or qualified professional can confirm what you owe where you live.