If you logged into Upwork recently, you may have noticed an update requiring your Business Number or they’ll start adding taxes on your freelancing income. Now, that wouldn’t be so bad, everyone should pay taxes.
However, legally they are ruining it for people who earn less and people who freelance as a side hustle. And so, I’m personally choosing to finally leave Upwork. There are a host of reasons I’ll share, but let’s start with the current problem.
Canadian Tax Laws
In Canada, if you earn less than $30,000 per year as a freelancer you aren’t required to collect taxes from your clients because you have a “small supplier exemption.” Last year I only made $4000 on their platform, so why are they collect taxes on my behalf?
The other issue here is once you start collecting taxes, you can’t go back. So let’s say I made $30,000 this year but make $10,000 next year freelancing. I still have to collect those taxes.
It’s a weird move on Upwork’s part and I don’t agree with it. I will likely cross that threshold later this year, but freelancing as a career can be unpredictable. If I lost all my clients tomorrow and went back to a regular job, I would be paying all these taxes out of my own pocket.
Just One of Many Problems with the Gig Economy
These freelance platforms have a host of issues. While Upwork is a major player and has a grim reputation among many professional freelancers, it’s not the only one.
Fiverr is known to have plagiarism scams galore. According to reviews, 99Designs has truly terrible customer service. And when it comes to actual crimes, like theft on the platform TaskRabbit, it doesn’t seem like the company cares to help you. Not to mention people are doing jobs they aren’t qualified to do resulting in serious potential harm, like this review that points out one person hired a “Tasker” who incorrectly mounted a heavy projector.
Whatever the type of job, there is an online platform out there trying to take a portion of your profit while ignoring the host of problems that come along with it.
Now, of course, these are just websites on the internet connecting 2 strangers, one who has a problem and the other who can solve it. All of them are basically just more complex versions of Craigslist.
Even so, the complete lack of responsibility they show has reached a boiling point. Now, I’m here to tell you specifically about Upwork since that’s the one I am most familiar with and the one I am leaving behind.
Here’s what I’ve learned while working as a freelancer.
Upwork Dips into Your Tips
In my 10 months on the platform, I’ve had 2 clients choose to tip me after they were impressed with my work. One sent me an extra $50 for a small project writing her social media posts.
Upwork took 20% of my tips. Employers in Canada are not legally allowed to do this, but since Upwork isn’t exactly employing me, I imagine they fall outside the laws. Since the digital landscape has evolved faster than governing bodies can regulate it, I’m unfortunately unable to file a complaint about this.
Upwork’s Dispute Resolution is Biased
Another common problem is the way they resolve issues between clients and freelancers. Luckily I never encountered any scammy clients, but many others have. From getting tricked into giving unjust refunds to being ghosted after doing the job. One user on Reddit even claimed that after providing all the evidence, Upwork still sided with the client.
There are a number of stories about freelancers getting the short end of the stick. If you actually read their Terms of Service, they do offer “Payment Protection” in which they will pay you for your lost time, but there are plenty of catches.
The Payment Protection only applies to situations with screenshots and hourly contracts. If you’re doing something like phone calls or you have a manual agreement, then it’s the client's word against yours. Another issue with the Payment Protection is the clause right below it.
And that folks, is more proof their “Payment Protection” is a complete joke. It’s a lie in their marketing that they will pay you even if the client refuses to pay. There are still cases of freelancers getting the client to pay them in arbitration, but the whole system has too many flaws for me to trust it.
Upwork Takes Advantage of Beginners
There are clients on Upwork who regularly post that they’ll give you 5-star feedback for your first job. When I used to browse gigs more often, I saw them at least 3 times per day.
It’s so common, people regularly post screenshots mocking it on Reddit. We’re talking thousands of words of writing for rates for $10. They create a completely distorted reality of what a beginner rate actually is. Even a beginner deserves to be paid for their time.
Personally, I think there should be a minimum requirement and I’ve seen job boards that do that. Given the international nature of Upwork, this is probably difficult to determine, but even so, the fact the bar has gone as low as it has is embarrassing and doesn’t reflect well on them.
Upwork Bans People Without Warning
Another issue is their inconsistent enforcement of the rules.
Twice I have had a client who I loved working with get kicked off the platform while we were still working together. Neither the client nor I was told why, and I probably lost out on a good chunk of income because of that.
Technically, I’m not allowed to communicate with them off the platform, but they reached out to apologize a few months later. One tried making a new account and had the same problem again. Since I didn’t want to risk losing my Upwork profile, I stopped communicating and moved on to other projects.
Time to Move On
When I started on Upwork and it opened my eyes to all the people out there that need good writing to be done. Unfortunately, I can’t align myself with a company so full of unethical business practices and I have been considering this move for a while.
For any freelancers still staying there, I understand why you’re there. They make it simple and easy to freelance without having to put yourself out there as much. I’ve decided I’m not going to give any more of my hard-earned dollars to a company that treats its most valuable resource so terribly and I hope maybe this article opened your eyes to why.