2026 tax year · Upwork freelancers
How much to set aside for taxes on Upwork
Upwork freelancers are self-employed. Clients on Upwork don't send you 1099s — Upwork handles reporting — and nothing is withheld from your earnings.
In the worked example below, a freelance developer on Upwork in New York (outside NYC) should set aside 23% of every payout — $23 of every $100.
Set aside from every deposit
23%
≈ per year / per month
$20,700
$1,725/mo
Rule of thumb: for every $1,000 you earn, set aside $230.
An estimate for planning purposes, not tax advice or a filing. Uses 2026 federal brackets (Rev. Proc. 2025-32), self-employment tax with the §199A (QBI) deduction, and state-level rates (Tax Foundation, 2026). Married-filing-separately filers should use "Single" as the closest estimate. Local income taxes (e.g. NYC, Ohio municipal) aren't modeled and would owe more than shown.
Which tax forms Upwork sends
| Form | What it reports | Threshold (2026) |
|---|---|---|
| 1099-K | Gross client payments processed by Upwork | Over $20,000 and over 200 transactions (lower in some states) |
- Your 1099-K shows what clients paid before Upwork's service fee; your bank shows what's left after it. Report the gross and deduct the fee, or the IRS's numbers won't match yours.
- Freelancers in several states (Massachusetts, Vermont, Virginia, Maryland and Illinois among them) can receive a 1099-K at much lower amounts than the federal threshold.
The form is paperwork, not the trigger: the IRS is explicit that you must report all income whether or not you receive a 1099.
Worked example: a freelance developer on Upwork in New York (outside NYC)
Hypothetical numbers, single filer, 2026 brackets. The calculator above is preloaded with them.
| Amount | |
|---|---|
| Gross client payments | $90,000 |
| Upwork service fees | − $9,000 |
| Software & equipment | − $2,400 |
| Net profit | $78,600 |
| Self-employment tax | $11,106 |
| Federal income tax | $5,219 |
| New York income tax | $4,079 |
| Set aside | 23% of income · $1,725/mo |
Skipping the deductions would push the set-aside to 27% — tracking them is worth about $3,600 a year here. See New York's self-employment tax breakdown for how the state part is figured.
Deductions upwork freelancers commonly claim
- Upwork service fees and Connects
- Software, subscriptions and equipment you use for client work
- A home office used regularly and exclusively for work
- Self-employed health insurance premiums (reduces income tax, not self-employment tax)
When to pay
The next federal estimated payment is due January 15, 2027 and covers income from Sep 1 – Dec 31, 2026.
| Due date | Covers income earned | Payment |
|---|---|---|
| Sep 1 – Dec 31, 2026 | 4th payment for 2026 | |
| Jan 1 – Mar 31, 2027 | 1st payment for 2027 — also the 2026 return deadline | |
| Apr 1 – May 31, 2027 | 2nd payment for 2027 | |
| Jun 1 – Aug 31, 2027 | 3rd payment for 2027 |
Upwork taxes by state
Your state changes the answer. Pick yours for a calculator preset to its 2026 brackets:
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Other platforms
Frequently asked questions
How much should I set aside for taxes on Upwork?
It depends on your profit, filing status and state. In the example on this page — a freelance developer on Upwork in New York (outside NYC) with $90,000 of income and $11,400 of deductions — the answer is about 23% of every payout, or $1,725 a month. Without tracking those deductions it would be 27%. Enter your own numbers in the calculator above.
Will Upwork send me a 1099?
Form 1099-K (gross client payments processed by Upwork): Over $20,000 and over 200 transactions (lower in some states). Whether or not a form arrives, the IRS requires you to report all of the income.
Does Upwork take taxes out of my pay?
No. Upwork freelancers are paid as independent contractors, so no income tax or self-employment tax is withheld. You cover it yourself with quarterly estimated payments — the next federal one is due January 15, 2027.
Do I have to pay quarterly taxes on Upwork income?
If you expect to owe $1,000 or more in federal tax for the year after withholding and credits, the IRS expects quarterly estimated payments. Paying too little, too late can mean an underpayment penalty even if you pay in full in April.
Know what to set aside from every Upwork payout
Confirm a Upwork deposit and Fern tracks what to set aside for tax on it — then shows what's safe to spend. Your money stays in your own bank account.
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Sources
Not tax advice. Fern provides estimates for planning a savings target; it doesn't file returns or replace a tax professional. Figures use 2026 federal brackets and standard deduction (IRS Rev. Proc. 2025-32 as amended by OBBBA), 2026 self-employment tax with the §199A deduction, and 2026 state rates (Tax Foundation). Upwork is a trademark of its owner; Fern isn't affiliated with or endorsed by Upwork. Examples are hypothetical.