The fee comes out before you see the money, but it's still your money for tax purposes
Fiverr typically takes a 20% commission from sellers, and Upwork charges a sliding service fee depending on lifetime billings with a client. Either way, what lands in your bank account is already net of that fee — but the fee itself is a real, deductible business expense, it just means your "gross income" for tax purposes is actually the amount before the platform took its cut, and the fee is one of your deductions.
Deductions Fiverr & Upwork freelancers often miss
- Platform service fees (Fiverr's 20% cut, Upwork's sliding fee) — deduct the full fee amount.
- Software and subscriptions used to do the work — design tools, dev tools, project management, AI tools.
- Equipment — computer, monitor, peripherals, anything bought primarily for client work.
- Home office — a portion of rent/mortgage, utilities, internet for space used regularly for freelance work.
- Withdrawal/payout fees some platforms charge to move money to your bank.
- Self-employed health insurance and retirement contributions — bigger above-the-line deductions worth asking a tax pro about once income is steady.
FAQ
Can I deduct Fiverr and Upwork service fees?
Yes, the platform's service fee is a legitimate business expense that reduces your net profit before tax.
I do work through both Fiverr and Upwork. Do I combine the income?
Yes, combine income from every freelance marketplace into one self-employment total for your tax estimate.
Does Fiverr or Upwork withhold any tax?
No, you're paid the net amount after platform fees with no tax withheld, you're responsible for setting aside and paying your own income and self-employment tax.