Fiverr is a platform for selling and buying services and digital products, with a minimum price tag of $5. The best way to make money on Fiverr is by offering a product or service that you can create for free or inexpensively in a short amount of time. Examples include graphic design of a logo or business card, image or video editing and e-books. There are even people on Fiverr willing to put a note in the Kotel or plant a tree in Israel for a fee. Upwork is a similar platform, except that instead of freelancers offering services, clients offer jobs and the freelancers respond with proposals.
Pricing your service or product
When pricing your service or product for Fiverr or Upwork, keep in mind the amount of time you need to spend and anything you’ll have to pay for, including 20% fees to the platform. $5 might seem attractive to clients, but if the service or product is worth more, don’t shortchange yourself. Also remember that you will pay a 3.4% fee to Paypal when you transfer the funds to your account.
Reporting income
Income from Fiverr or Upwork must be reported just like any other income, from the first shekel earned. If you don’t already have a business in Israel, you’ll need to open an Osek Patur or Zair. Use an invoicing system to create receipts for each sale, even if the clients themselves don’t need them. Don’t make the expensive mistake of waiting to report income until you’re making a significant amount of money.
When reporting income, you can also report expenses, such as fees to Fiverr and Upwork, transfer fees and technology. Consider working with an accountant who specializes in online transactions, to ensure you are compliant and not overpaying on your taxes.
Is it worth it?
Offering services on Fiverr or Upwork from Israel can be a smart way to earn money—especially if you’ve got marketable skills, a registered business and a streamlined workflow. But don’t let the simplicity of the platforms fool you: behind every $5 gig is a tangle of fees, paperwork and tax reporting requirements. Instead of offering cheap services, use the platforms to build up your portfolio or to sell products or services that are worth real money.
