Upwork tax: how freelancers, developers, translators and online tutors can legally pay 0% US tax

What Upwork, Fiverr, HackerOne and Bugcrowd ask of developers, translators, designers, tutors and security researchers outside the US, when their pay counts as US income and how a trip or a move to the US changes the tax, in 2026.

Upwork, Fiverr, HackerOne and Bugcrowd ask developers, translators, designers, online tutors and security researchers outside the United States about their US tax status. The US guide for nonresidents reads: "If there is no employee-employer relationship between you and the person for whom you perform services, your compensation is subject to the 30% (or lower treaty) rate of withholding." At that rate, the tax on $40,000 of fees is $12,000.

Where the work is done

Section 861 of the US tax code lists among US income: "Compensation for labor or personal services performed in the United States". The US guide for withholding agents reads: "The place where the services are performed determines the source of the income, regardless of where the contract was made, the place of payment, or the residence of the payer." The same guide covers work done in both places: "If the income is for personal services performed partly in the United States and partly outside the United States, you must make an accurate allocation of income for services performed in the United States based on the facts and circumstances."

Upwork

Upwork asks every freelancer for a US tax form: Form W-9 from US persons, including US citizens who live abroad, and Form W-8BEN or W-8BEN-E from everyone else. Upwork's help center says the tax address must be outside the United States and the statement of source confirms that the work is done outside the United States. The US guide for withholding agents reads: "If the income is for personal services performed in the United States, it is from U.S. sources."

The form expires on December 31 of the third calendar year after the year it was submitted. Without a valid form, Upwork blocks withdrawals and may have to withhold up to 30% of future earnings. The instructions for Form 1042-S tell payers to rely on such forms: "In most cases, you should rely on the withholding documentation you have collected (Form W-8 series, Form 8233, etc.) to complete your Form 1042-S submissions."

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Fiverr

Fiverr keeps tax forms in the Financial Documents tab of the Earnings page. Its help center says that a freelancer who answers no to the US person question saves the declaration, and one who answers yes fills out Form W-9. Eligible freelancers download Form 1099-K from the same tab, and the instructions for that form define a term used in their rules for foreign payees: "A “foreign address” means any address that is not within the United States (the states and the District of Columbia)."

HackerOne and Bugcrowd

HackerOne pays a bounty only to a researcher with a valid tax form, an approved identity check and a payment method on file. The form is renewed every three years, the holder of the form cannot be changed, and rewards cannot be sent to a third party. The US guide for withholding agents defines the payee: "In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income."

Bugcrowd says individuals who are not US persons must submit a substitute Form W-8BEN to receive payouts.

Developers: work or rights

US tax regulations sort deals involving software and other digital content into four kinds, and one of them is: "The provision of services for the development or modification of the digital content".

The same regulations decide by the facts of each deal: "The determination of whether a transaction involving newly developed or modified digital content involves the provision of services described in paragraph (b)(1) of this section is based on all the facts and circumstances of the transaction, including, as appropriate, the intent of the parties (as evidenced by their agreement and conduct) as to which party is to own the copyright rights in the digital content and how the risks of loss are allocated between the parties."

Licenses to a developer's code, a designer's templates or a translator's copyright in a translation bring royalties, which Murblz experts have described in the guide to royalty tax. Fees that brands pay to video creators are covered in the guide to Instagram tax.

Trips to the United States

A freelancer who works during a trip to the United States earns US income for the days of work there, with one exception in the US guide for withholding agents: "However, under certain circumstances, payment for personal services performed in the United States is not considered income from sources within the United States."

Section 861 of the US tax code sets three conditions for it. The first is that "the labor or services are performed by a nonresident alien individual temporarily present in the United States for a period or periods not exceeding a total of 90 days during the taxable year", and the second is that "such compensation does not exceed $3,000 in the aggregate". The third condition concerns the payer: a client abroad that does no business in the United States, or the office abroad of a US client.

Tax treaties set their own rules for the self-employed. The US guide for withholding agents reads: "Under some tax treaties, pay for independent personal services performed in the United States is treated as business income and taxed according to the treaty provisions for business profits." It continues: "Under other tax treaties, pay for independent personal services performed in the United States is exempt from U.S. income tax only if the independent nonresident alien contractor performs the services during a period of temporary presence in the United States (usually not more than 183 days) and is a resident of the treaty country."

The model tax treaty of the United States follows the first approach: "Profits of an enterprise of a Contracting State shall be taxable only in that Contracting State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein." The US guide for nonresidents names the form for such a claim: "If you perform personal services as an employee or as an independent contractor and you can claim an exemption from withholding on that personal services income because of a tax treaty, give Form 8233 to each withholding agent from whom amounts will be received."

Remote jobs with US employers

Some freelancers take a job with a US company and keep working from home. The US guide for withholding agents splits the pay of an employee who works in both countries: "If the services are performed partly in the United States and partly outside the United States by an employee, the allocation of pay, other than certain fringe benefits, is determined on a time basis." For pay that covers several years, the US guide for nonresidents reads: "The source of multiyear compensation is generally determined on a time basis over the period to which the compensation is attributable."

For employees, the model tax treaty of the United States reads: "salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that Contracting State unless the employment is exercised in the other Contracting State."

Long stays in the United States

For 2025, the US guide for nonresidents sets the substantial presence test: "To meet this test, you must be physically present in the United States on at least: 31 days during 2025; and 183 days during the 3-year period that includes 2025, 2024, and 2023, counting: All the days you were present in 2025, 1/3 of the days you were present in 2024, and 1/6 of the days you were present in 2023."

The same guide adds an exception: "Even if you meet the substantial presence test, you can be treated as a nonresident alien if you: Are present in the United States for less than 183 days during the year, Maintain a tax home in a foreign country during the year, and Have a closer connection during the year to one foreign country in which you have a tax home than to the United States". It also reads: "You must attach a fully completed Form 8840 to your income tax return to claim you have a closer connection to a foreign country or countries."

For a freelancer who passes the test, the instructions for Form W-8BEN read: "If you satisfy the substantial presence test, you must notify the withholding agent, payer, or financial institution with which you have an account within 30 days and provide a Form W-9."

Where freelancers lose money

Upwork says it cannot refund tax that it has withheld and sent to the US tax authority, even if the form arrives later. Murblz experts have described the refund of such tax through a US return in the guide to US tax on YouTube, KDP and app store income. For clients who pay before the work starts, the US guide for withholding agents reads: "A payment is treated as being from sources within the United States if the source of the payment cannot be determined at the time of payment, such as fees for personal services paid before the services have been performed."

The instructions for Form 8233 read: "If you have income from independent personal services, you generally cannot claim a treaty exemption if you have an office or fixed base in the United States available to you". They also read: "If a nonresident alien fails to provide a properly completed form, the withholding agent cannot accept it and is required to withhold."

What decides the rate

The model tax treaty of the United States ties its benefits to residence: "the term “resident of a Contracting State” means any person who, under the laws of that Contracting State, is liable to tax therein". The instructions for Form 8233 add: "A nonresident alien can claim a tax treaty benefit on this form only if that individual is the beneficial owner of the income and meets the residency requirement and all other requirements for the requested benefits under the terms of the tax treaty."

Tax residence can be checked with the Murblz tax residency calculator, and the rules for changing it are described in the guide on how to become tax resident abroad.

0% is possible, but not for everyone

Work done outside the United States is not US income. The US guide for nonresidents reads: "Resident aliens are generally taxed on their worldwide income, the same as U.S. citizens. Nonresident aliens are taxed only on their income from sources within the United States and on certain income connected with the conduct of a trade or business in the United States." Upwork reminds freelancers that their own country can tax the same earnings even when Upwork collects no tax.

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