There are many materials about freelancing, and almost all of them end with how to find your first client. The most important thing starts later, since the difference between the amount in the contract and the amount in your account turns out to be significantly larger than expected. Let’s look at the full path of money from the client to you, as well as how to arrange it legally. An immediate disclaimer. I am not an accountant or a lawyer, so the figures below are guidelines for understanding the mechanics, not tax advice. Before registration, it is worth talking to an accountant once, since a mistake in the first months costs more than a consultation.

How Much the Platform Takes

Let’s start with the largest and least obvious expense item. Since May 2025, the largest freelancing platform has switched to a variable service fee in the range of approximately zero to fifteen percent per contract instead of the former fixed rate. The specific percentage is shown when submitting a proposal for a project, and then it is fixed for the entire contract. This is in addition to currency conversion when withdrawing money, which takes approximately another two percent. Let’s look at a specific example. From a one-thousand-dollar contract with a ten-percent commission and withdrawal through a payment service, approximately eight hundred and eighty dollars reaches you, and this is still before paying taxes. A separate expense item is the cost of the platform itself, that is, tokens for submitting applications, subscriptions, and profile advertising. There is an unpleasant detail here that is worth knowing in advance, since an entrepreneur on the simplified taxation system cannot reduce taxable income by the amount of expenses. That is, you spend this money, but in tax accounting it does not exist.

The Trap Where People Lose Money Most Often

Income is declared in the full accrued amount, and not in the amount that reached your account after commissions were withheld. That is, if the client paid one thousand dollars and you received eight hundred and eighty, the tax is calculated from one thousand. People who declare the amount actually received later get additional tax assessments together with a fine, and this is usually discovered not immediately.

How Much Is Actually Left

Now let’s calculate the full path for an entrepreneur on the third group of the simplified taxation system. The contract is one thousand dollars. The platform withholds approximately one hundred dollars in commission. Conversion takes another approximately twenty. About eight hundred and eighty arrives in the account. Then there are taxes, which are calculated from the full one thousand. The single tax at a rate of five percent is fifty dollars. The military levy at a rate of one percent is ten dollars. Approximately eight hundred and twenty dollars remains. In addition, there is the single social contribution, which is a fixed monthly payment and does not depend on the amount of income, so with small earnings it is felt much more strongly than with large ones. The practical conclusion is that approximately eighty percent of the contract reaches you, and this is exactly the figure you should use as a starting point when calculating your rates.

About the American Tax and Form W-8BEN

Another thing through which people lose money without understanding the reason. The United States can withhold up to thirty percent from the income of non-residents, and this is called withholding tax. Ukraine and the United States have a convention on the avoidance of double taxation, signed back in 1994, thanks to which, with confirmed Ukrainian residency, this rate for income from services is zero. For this, you need to fill out Form W-8BEN, which confirms that you are not a U.S. resident and have the right to benefits under the convention. It is completed in the settings of the platform itself, takes a few minutes, and it should be done before the first withdrawal of funds, not afterward.

Which Group to Choose

Some consultants consider the third group mandatory for working with foreign clients, since it is specifically designed for foreign economic activity. Others note that the second group allows providing services to legal entities regardless of their country of residence.

Since the issue is controversial and depends on the specific circumstances, this is exactly the case when a one-time consultation with an accountant pays for itself many times over. The general guideline for working with foreign countries remains the third group with a five-percent single tax rate.

Why Working Without Registration Is Becoming More Difficult

Previously, many people worked in the gray zone, and now this scheme is becoming riskier. Platforms are required to report users' income to tax authorities above a defined threshold, and international exchange of financial information between countries is already in effect. In practice, this means that payments to an individual's card from abroad have stopped being invisible, and the question of their origin arises sooner or later. In addition, without entrepreneur status, income is taxed at significantly higher rates, so legal work turns out to be not only safer, but also cheaper.

Additional advantages include the ability to issue invoices, accept payments without questions from the bank, have access to business accounts, as well as have work experience credited through the social contribution.

What Is Needed to Work with Foreign Countries

A separate paper contract with a stamp is usually not required, since an invoice, that is, a bill, is sufficient for the bank, and the client's payment of this invoice is confirmation of the work being completed. Banks do not require a translation of every contract if the transaction amount does not exceed the financial monitoring threshold. Foreign currency revenue must be transferred to a Ukrainian account within the specified period, and currently it is one hundred and eighty days. Income is recorded at the exchange rate of the National Bank on the date the funds are credited to your account, and exchange rate differences during subsequent conversion are not considered separate income.

About Realistic Expectations

The most honest part that is absent from materials that sell courses. The first months usually go toward filling out a profile, submitting dozens of applications, and getting the first small orders at low rates, since platforms use a rating system, and without reviews it is difficult to compete. Expenses for application tokens begin immediately, while income does not. A stable flow of orders appears when a portfolio and reviews accumulate, and this is measured in months, not weeks. Therefore, it is more reasonable to move to freelancing as your main source of income gradually, not leaving your previous job until a predictable flow appears.


Sources

Materials from accounting companies on taxation of income from freelancing platforms, legal guides on foreign economic activity, data on platform commissions as of mid-2026