oDesk Payroll

The Benefits of Full-Time Employment, The Flexibility of Freelancing

  • Access benefits unavailable to most freelancers, such as group health insurance and 401(k) retirement plans
  • Avoid the hassle of managing quarterly self-employment taxes

Without decreasing your net pay!

New to oDesk? The upside is huge

Workers can join oDesk Payroll to access affordable group rates on health insurance and retirement programs unavailable to most freelancers, plus guaranteed payment and other added features of working through oDesk.

Assume that your client pays $25 per hour:

staffing agency
W-2 through
oDesk Payroll
Client pays$25/hr$25/hr
Taxes and fees$7 (26%) $5 (20%)
Worker gets$18.48$20
Guaranteed payment? NoYes

Join oDesk and:

  • Enjoy Guaranteed Payment — oDesk assures that every hour worked is an hour paid.
  • Invoice Easily — Avoid the hassle of creating invoices and time sheets, with oDesk's proven system that does it all for you.
  • Control Your Income — Set your own hourly rate based on your skills, experience and reputation.

Existing oDesk contractor? Get more value for the same pay

We designed oDesk Payroll so that transitioning from 1099 to W-2 classification costs you and your clients nothing — membership in oDesk Payroll will not affect your ability to compete for work!

Assume that your client pays $25 per hour:

through oDesk
W-2 through
oDesk Payroll
Client pays$25/hr$25/hr
Taxes and fees $5
10% oDesk fee and
~10% self-employment tax
20% fee includes
payroll taxes
Worker gets ~$20$20
Guaranteed payment? Yes Yes


What benefits are offered via oDesk Payroll?

oDesk Payroll offers several benefits for workers:

  • Simplified Taxes: For every hour you work through oDesk Payroll, you avoid the need to pay self-employment taxes or estimated quarterly tax payments. Because you are a W-2 employee of oDesk's staffing agency, payroll taxes are deducted from your take-home pay and submitted on your behalf.
  • Group Health Benefits: If you average at least 30 hours per week via oDesk Payroll, you become eligible for one of Anthem's affordable group health plans, which carries significant advantages over individual plans — it includes higher benefit limits and no restrictions for pre-existing conditions. If you drop below 30 hours per week you become eligible for COBRA.
  • 401(k) Savings Plans: oDesk Payroll workers are eligible to participate in the 401(k) savings plan after one month.
  • Unemployment benefits: Your employment via oDesk Payroll allows you to qualify for state unemployment benefits should your work slow down or stop (self-employed contractors are unable to file for unemployment benefits.)

What are the healthcare plan options and costs?

The plan options and monthly premiums are based on your age, coverage selections, and plans available in your location. Click here to request an exact quote for your situation.

Who determines whether I work as an independent contractor or through oDesk Payroll?

You and your client can independently determine the best working relationship for you. Many clients will decide that because of the nature of your work, they must hire you via oDesk Payroll to ensure compliance with worker classification guidelines. It then becomes your decision if oDesk Payroll membership is right for you, and whether to continue working with the client if the W-2 classification is required.

Will oDesk Payroll help me find work?

No - you are still responsible for finding your own work on oDesk. oDesk Payroll is an alternative way to be paid on oDesk, but you still source and select your own contracts. You retain all of the flexibility to find and accept work as you see fit.

How does my compensation change?

In most cases the net impact after taxes is minimal since you will no longer owe self-employment taxes. You will notice an impact to your take-home pay, though. As an independent contractor, you pay your taxes directly from your take-home pay on a quarterly basis. As an employee via oDesk Payroll, the payroll and income taxes are accounted for and deducted from your take-home pay, and you do not need to pay any significant additional taxes.
You still determine your own rate on oDesk, and you may choose to renegotiate your rate to account for any additional cost to you. Discuss with your clients your classification status to prevent confusion.

What are the eligibility requirements of the health care benefits?

You must work at least 30 hours a week through oDesk Payroll for one month. After that month, you become eligible on the first day of the following month, so the total waiting period will be between 31 and 61 days. After that, you have to maintain an average of at least 30 hours of work per week to maintain your benefits. Since these are group benefits, the health care plans have none of the coverage limits or pre-existing condition requirements found in most individual plan options.

What happens if I drop below 30 hours per week after my initial eligibility?

Your hours are reviewed bi-weekly. If you drop below the 30-hour average, oDesk Payroll will contact you to discuss your expected hours going forward. oDesk Payroll can continue your coverage at its discretion if the drop in hours is temporary. If your hours are expected to remain below 30 hours per week going forward, you will be eligible for continuation of benefits through COBRA.

Are there any rate limitations as an hourly employee through oDesk Payroll?

Yes — you must earn at least minimum wage for your state if you are managing the contract through oDesk Payroll. Because you receive 80% of what the employer pays, the employer's pay rate must be at least 25% higher than the minimum wage for your state. For example, if your state miminum wage is $8/hour, the employer rate must be at least $10/hour. To calculate the minimum employer rate, multiply your state's minimum wage by 1.25.

Why is oDesk Payroll only for contractors in the U.S. and Canada?

oDesk Payroll is designed specifically for U.S. and Canada employment regulations. It allows employers a way to ensure compliance with worker classification, and enables contractors a means to acquire group health care benefits. In the future, we will be evaluating similar programs in other countries.

How do I sign up for oDesk Payroll?

Contractors may sign up for the oDesk Payroll program only at the request of their respective clients since a worker's tax classification can have legal and compliance implications for the hiring company. To enroll, the client should contact us at payroll@odesk.com and include their company name and oDesk username in the email.