by Hope
As you know I am laser focused on building my virtual assistant consulting business. Today I am here with a question for the BAD community about the service fees I incur.
Little Background
When I began twelve years ago, I was able to build my business using to primary methods.
First, I advertised in local business focused magazines and newspapers. My first client found me through a newspaper that came to his wife’s law office. He ended up hiring me as customer service for one company and tech support for another.
Second, I applied for project based jobs on Guru.com. This is how my longest running client found me. I started as a part time marketing assistant and moved up to customer service and product manager over 10 years with them.
Now Today
I thought as I began to focus on rebuilding my consulting business that I could go about things in a similar manner. But time has changed things a bit. Virtual Assistant is now a common term. And I am competing with a worldwide workforce.
Tim Ferris’ book Four Hour Work Week brought using an international workforce to the forefront. Highlighting the opportunity to hire a quality, low cost support staff. It made competition in the virtual assistant world fierce.
My Question: Service Fees
As a result of all of this, I am changing direction. Or at least the platform and proposals I am using.
I am now focusing on Upwork.com and taking advantage of their detailed filter options for finding work. I specifically like the option to limit your search results to projects seeking US Based Workers only. This is huge for my particular industry.
Here’s my question: each of these platforms charges a service fee to the contractor.
The service fee comes out of the contractors pay depending on what level of membership the contractor has. I am charged 8.95% of any pay on Guru and 20% for the first $500 earned per client and 10% up to $10,000 with a client on Upwork.
How do you account for the service fee when it comes to tax time?
Interesting. I would think they would just 1099 you on the net amount. Then just claim that amount as income. If they 1099 you on the gross then deduct as a business expense.
I agree. They will either pay you less off the bat on the 1099 or deduct it. Are you adding this 10-20% into the rate you are charging? The 15$-20$ an hour you proposed a few posts ago is quickly dwindling….