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 $10,000 with a client on Upwork.
How do you account for the service fee when it comes to tax time?
Hope is a resourceful and solutions-driven business manager who has spent nearly two decades helping clients streamline their operations and grow their businesses through project management, digital marketing, and tech expertise. Recently transitioning from her role as a single mom of five foster/adoptive children to an empty nester, Hope is navigating the emotional and practical challenges of redefining her life while maintaining her determination to regain financial control and eliminate debt.
Living in a cozy small town in northeast Georgia with her three dogs, Hope cherishes the serenity of the mountains over the bustle of the beach. Though her kids are now finding their footing in the world—pursuing education, careers, and independence—she remains deeply committed to supporting them in this next chapter, even as she faces the bittersweet tug of letting go.
Since joining the Blogging Away Debt community in 2015, Hope has candidly shared her journey of financial ups and downs. Now, with a renewed focus and a clear path ahead, she’s ready to tackle her finances with the same passion and perseverance that she’s brought to her life and career. Through her writing, she continues to inspire others to confront their own financial challenges and strive for a brighter future.
Interesting. I would think they would just 1099 you on the net amount. Then just claim that amount as income. If they 1099 you on the gross then deduct as a business expense.
I agree. They will either pay you less off the bat on the 1099 or deduct it. Are you adding this 10-20% into the rate you are charging? The 15$-20$ an hour you proposed a few posts ago is quickly dwindling….