Our users sometimes ask us how Deel compares to Upwork. The two are fundamentally different, and we wanted to walk you through each of the products to help you understand the differences better.
Disclaimer: All information about Upwork is sourced from its official website. We will check for changes regularly and update this article accordingly.
What is Upwork
Upwork is one the largest marketplaces for freelancers and companies seeking service provides.
What is Deel
Deel is the first payroll platform for remote teams that connects localized compliance and payments in one system of record and automates everything.
This already outlines the biggest difference between Upwork and Deel.
So, what are the differences between Upwork and Deel? Let's break them down in detail.
Finding talent Deel vs Upwork
As we already mentioned, Upwork is a marketplace where thousands of freelancers offer their services. A client in need will simply put up a job and freelancers will bid for it.
Deel, on the other hand, is a payroll service and doesn't offer talent sourcing as it's not a marketplace. You find your talent elsewhere and safely onboard them on Deel.
Compliance Deel vs Upwork
Upwork has standardized contracts for all jobs but offer little to none protection with misclassification risks unless you are paying for Upwork Enterprise. Mitigating risks and compliance services, as well as verification processes, comes only for Enterprise clients which is quite costly. Upwork doesn't provide any compliance in their marketplace which puts you at high risk. They also insulate themselves completely from the relationship.
Deel, on the other hand, has contract samples that are tailored to local labor laws and take into account both parties' countries and are being reviewed by a team of 120 legal partners. Deel's compliance team works with local legal partners to ensure all the compliance documents such as work permits, adequate entity establishments, and any other requirements are in place. All these documents can be requested by the client and transparently stored for each contract. Similar to Upwork, Deel doesn't take responsibility in the case of audit or misclassification.
Collecting tax forms Deel vs Upwork
When it comes to tax forms, Upwork doesn't handle Forms 1099-MISC forms as they are freelancers' responsibility. Upwork takes the responsibility to file Forms 1099-K. US citizens need to submit Form W-9 to Upwork so they can accurately generate Forms 1099-K. Non-US citizens are required to submit W-8BEN Forms to Upwork as proof.
Deel has an automatic process for collecting and generating the following tax forms: 1099-MISC, W-9 and W-8BEN(E). Users only submit their information and Deel generates all the forms and stores them under the Taxes tab. If you choose to, you can submit Form 1099-MISC directly through Deel on one click, thanks to our tax partners, Intuit.
Accounting Deel vs Upwork
Upwork generates invoices for all payments made within a contract.
Deel generates all invoices automatically as well. On top of that, you can upload your own invoice that supersedes the original invoice Deel creates or integrate accounting tools like QuickBooks to streamline the process.
Payments Deel vs Upwork
Upwork offers several payment options but limits currency to USD only. Here is the overview.
Upwork payment methods for clients:
- Credit card: Visa, Discover, Mastercard, and American Express. No virtual cards are accepted.
- PayPal
- Bank account (ACH)
Upwork payment methods for freelancers (fees on top of Upwork fees):
- Payoneer: $2.5 + Payoneer fee per withdrawal, with processing time up to 2 days
- PayPal: $1 + PayPal fee based on the country per withdrawal;
- Wire transfer in USD: $30 + FX fee charged by the bank per withdrawal, with processing time up to 7 business days;
- Direct transfer to US bank: usually free of charge for US bank accounts (if qualified)
Deel offers flexibility when it comes to pay-in and payout as the payment process is two-fold.
Deel payment methods for clients:
- Wire transfers
- Bank account (ACH)
- Direct SEPA
- Direct Debit
Deel payment methods for contractors:
- PayPal: reduced fee of 2.5% globally, with processing time 2-3 hours;
- Payoneer: $12 minimum fee or 1% of volume, with instant payout;
- Local bank transfers: Deel partnered with 10+ payment providers such as TransferWise to provide local payments whenever possible, instead of wire transfers through SWIFT that are costly (charging FX fees as well) and take a long time to process.
- Wire transfer (SWIFT): If a local transfer is not possible, Deel offers SWIFT payments as well. Depending on the case, the processing time is anywhere from a few hours to 5 business days.
Deel gives both clients and contractors a better payment service, giving them the option to split withdrawals, withdraw in different methods and currencies with 100+ local currencies supported, overall supporting 180+ countries. Here's how Deel payments flow work.
Service fees and pricing
Upwork freelancer fees
Upwork is free to sign up. However, in order to apply, freelancers need to pay for job-applying credit, called connections. It costs $.15 per connection and you need between and one and six connections to submit your proposal.
Upwork freelancer service fees
Upwork charges a service fee for any contract you have with non-Enterprise clients. Here is a breakdown, depending on your earning:
- $0-$500: 20%
- $500.01-$10,000: 10%
- $10,000.01 or more: 5%
You can learn more about Upwork service fees here.
Deel contractor fees
Deel is 100% free for contractors. They can sign up, create contracts and withdraw with no fees. The only fees contractors may pay are the payment providers fees (mentioned above). Deel doesn't take any fees from that and always try to optimize payouts with our payment providers based on the method and currency. Deel continues to make partnerships with payment partners and offer a good payment experience for all users.
Upwork client fees
Upwork clients pay 3% fees with each payment they make to their freelancers. Upwork offers three tiers for client pricing: free, $49.99 and $849.99 per month. You can learn more about it here.
Deel client fees
Deel's monthly subscription starts at $49 per active contract. Active contracts are those where payments occurred within a month. This gives you the possibility to keep a contract inactive until you need to work again with the same contractor. You can learn more about Deel pricing here. If you have a bigger volume of contractors, Deel offers custom pricing which can be agreed on upon request.
Additional exclusive features on Deel:
- Off-cycle payments: Clients can pay their contractors outside of set cycles
- Payment adjustments: You can add deduction, expenses, and bonuses for each payment in a click.
- Mass Pay: When the payments are due, you can process payments in bulk with a simple flow that takes minutes to complete.
- Team feature to keep everything under one roof.
- Early payout: Selected contractors can get paid even before their payday.
- Compliance documents collection: Deel collects and stores all documents that are relevant to a specific country.
- Accounting software integration: QuickBooks and Xero
- Health insurance
The Conclusion
As you can see Deel and Upwork are quite different products. Upwork is a good solution if you are looking for a marketplace to source your freelancers for shorter projects. Deel is a good solution if you want to streamline your payroll and compliance once you already have talent.
Are you ready to streamline your payroll and compliance?
Learn more about how Deel works or schedule a demo with our product specialist. We will help you assess your current setup and suggest ways to improve your remote team payroll.