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Elance.comIllegal taxation

Review updated:

Elance.com charges a monthly fee to place an ad on their site in order for freelancers (like me) to find work. This is a common and reasonable business practice that pre-dates the internet (newspapers and trade magazines, for example). However, Elance also wants 6% of your wages! This is tantamount to a tax and I don't know how they legally get away with it! I've worked for staffing agencies in the past and if they take a percentage of your income, then they act as your employer and they withhold taxes for you, give you paid holidays, and in some cases, discounts on medical insurance as well. But all Elance does is host a website that allows you advertise (which you pay for, monthly), PLUS they want 6% of your gross earnings! I hope the justice department looks into this (it sounds like the electronic equivalent of indentured servitude). If there's nothing illegal about it, I hope that people aren't foolish enough to just hand over their income to these clowns for doing essentially nothing to earn it, except for allowing you to post an advertisement (which, as I pointed out previously, you already pay for separately on a monthly basis). Elance, shame on you for your greed!

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Comments

  • Ro
      Dec 13, 2009

    I totally agree, they take 8.75% of any transaction (wich is a lot considering that most projects are milestone based) and they Do Not take the percetage of your Gross Income, they take 8.75% of Every Single Transaction you make!!, Plus 2.75% in Payment Proccessing fees.

    And you still need to pay for the membership, a while ago if you was a member they only took 4.75% per transaction and 1.4% in payment processing fees, now regardless your membership type they take 8.75% and 2.75% of every transaction.

    Hope some company makes a site like that one (professional enough to get clients like we do on elance), cause right now there are not any other freelance sites like this one.

    +1 Votes
  • Ta
      Jan 26, 2010

    I agree that it can be frustrating to pay a fee and would love if Elance were free but the way that I look at it is this, if you had to market your services somewhere else, like via online or offline advertising, you would be paying way more than 6%. or whatever fee Elance charges.

    I personally get many projects via Elance and don't even miss those fees. In some ways, I actually prefer Elance to other ways of traditional marketing and just consider this meager amount the cost of doing business online. Plus, Elance saves so much time with the feedback system and the ability to scrutinize your buyers before you even bid on their project that it can't be beat. Just my two cents.

    0 Votes
  • Nu
      Jan 28, 2010

    Elance is a business that works like any other. You can choose to use it or not. very simple! LOL " I hope the justice department looks into it" you really have some screws loose my friend.

    I can understand you not liking them taken money from both ends but thats up to them and its there business model, ( a very successful one) I cant see how any nut would say elance is TAXING you, they set up a price, they could offer it to you for free with no montly fee then charge 15% on any projects but it really doesn't matter and you would still pay. I think your logic is flawed and better spend your time doing something more productive then complaining with zero ground to imply there business is not lawful, go pay for ads in newspapers for your service and see how that works out for you :). If you dont like it go start an elance that charges no fee's, see how that works out for you as well.

    0 Votes
  • Sc
      Apr 21, 2010

    First off all, please refrain from referring to me as your "friend." I don't know you and you certainly aren't my friend.

    Secondly, I do not have a screw loose and you certainly are not qualified to make such an assessment. When I see a personal attack like that in any dispute, it's obvious who has no real ammo and must resort to name calling. Grow up.

    Yes, Elance IS taxing you. They're not operating as your employer by withholding taxes, social security, unemployment insurance, or worker's compensation insurance, and they don't offer you paid holidays, vacations, or sick leave, and they don't provide you with medical or dental benefits. In short, the only value they add is providing you a place online to find work. As I previously pointed out, they charge you a monthly fee for this (which is perfectly reasonable, and has precedent in print media such as newspapers and trade magazines). The problem is that in addition to this, they also take a percentage of your earnings. This is simply unfair and, possibly (if the attorney general's office had the bandwidth to review it) illegal. It certainly isn't fair.

    Are you familiar with the concept of indentured servitude? Study a little history and you'll find out why "hey, it was in the contract and you signed it, so live with it" does not make something fair or right and, in the case of indentured servitude, legal.

    I'll give you the benefit of the doubt and assume that you work for Elance and are not just some bored 15 year old waiting for your next Halo game to start and attempting an adult conversation with broad, vague, and sweeping dismissals that have no substance and the aforementioned name calling. You are forgiven. Back to Halo or to your next meeting with your bosses at Elance.

    In general, my hope in posting this is that someone will create a good and fair alternative to Elance. A site with similar (or even better) search and business networking tools, and that has a price structure that is fair and reasonable. Perhaps several options, such as pay per ad, or pay per click (like Google), or levels of membership, etc. But under no circumstances should they take a percentage of anyone's earnings.

    0 Votes
  • Re
      Aug 31, 2012

    Before determining if an individual is privy to any fringe benefits (sick leave, vacation leave, health, etc.) one must first establish if an employer or employee relationship exists. Such relationships are determined by common law. This mean does an employer have the right to control the individual, such as: when and where to work, control lunches and breaks, request and individual to attend mandatory meetings, train the individual, etc. On the other hand an independent contractor is one who has the freedom to choose when and where to work, make their services available to the public, able to incur a profit or loss (e.g. Form 1040 Schedule C expenses). An employment agency normally has a contractual relationship with a company. An agreement is reached who will be the employer of record for "payment of wages" or the employer of record for "common law" purposes. Most employment agencies are the employer of record for payment; therefore, they are required to withhold the applicable payroll taxes. For further information regarding employer-employee relationships please refer to the Internal Revenue website, irs.gov and do a search on independent contractor vs employee. It should help you understand the payroll tax situation.

    0 Votes

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