In 2023, 8.4% of the US labor force worked as independent contractors and the market for freelance services reached $1.4 billion on Upwork alone, making it worth digging into the trends behind who is freelancing, why they choose it, and how they are paid.
Key Takeaways
- 8.4% of the U.S. labor force worked as independent contractors in 2023
- 9.1% of U.S. employment was in the form of independent contractors in 2023
- 15.3% of U.S. workers earned money through gig work in 2023
- $1.4 billion was the global market size for freelance services on Upwork in 2023 (Upwork marketplace payments)
- $3.3 billion was the total gross services volume on Upwork in Q4 2023 (Upwork)
- $489.6 million in revenue was reported by Upwork for 2023 (Upwork annual results)
- In 2023, Upwork revenue was $489.6 million (Upwork annual results)
- Upwork’s U.S. dollar-based payments volume in 2023 was $2.8 billion GSV (Upwork annual results)
- In Upwork’s 2023 results, GSV grew year-over-year by 7% (Upwork earnings release)
- 43% of freelancers reported losing work because of procurement delays in 2022 (Freelancers Union survey)
- 38% of freelancers reported late payments from clients in 2022 (Freelancers Union survey)
- 71% of freelancers reported being paid late at least once in the last 12 months (PayPal/Upwork survey, 2021)
Freelancing keeps growing, with millions earning through gig work and facing late payments and admin burdens.
Workforce
18.4% of the U.S. labor force worked as independent contractors in 2023[1]
Verified29.1% of U.S. employment was in the form of independent contractors in 2023[2]
Verified315.3% of U.S. workers earned money through gig work in 2023[3]
Verified420.3% of U.S. workers were self-employed in 2023[4]
Directional511.7% of U.S. workers reported working as independent contractors in 2022[5]
Single source663% of freelancers in the U.S. are men (freelance survey, 2022)[6]
Verified737% of freelancers in the U.S. are women (freelance survey, 2022)[6]
Verified848% of U.S. freelancers are 25–34 years old (freelance survey, 2022)[6]
Verified934% of freelancers worldwide work in writing/translation services (Upwork, 2023)[7]
Directional1026% of freelancers worldwide work in software development (Upwork, 2023)[7]
Single source1118% of freelancers worldwide work in design (Upwork, 2023)[7]
Verified1222% of freelancers worldwide work in marketing/sales services (Upwork, 2023)[7]
Verified1347% of freelancers say they do freelancing because they can choose projects[8]
Verified1438% of freelancers say they freelance because they want flexible schedules[8]
Directional1524.6% of workers in the EU (15+) were self-employed in 2023[9]
Single source16In France, 9.6% of employed persons were self-employed in 2023 (INSEE)[10]
Verified1745% of freelancers reported that they plan to increase their freelancing activity in 2024 (Freelancers Union)[11]
Verified1838% of U.S. freelancers said they had a full-time client in 2023 (Upwork)[12]
Verified1928% of U.S. freelancers said they rely on freelancing for most of their income in 2023 (Upwork)[12]
DirectionalWorkforce Interpretation
In 2023, self-employment and contractor work remain a major route to income in the US and Europe, with 20.3% of US workers self-employed and 15.3% earning money through gig work, while freelancers worldwide are concentrated in writing and translation at 34% and software development at 26%, and US freelancers increasingly treat freelancing as a core livelihood with 28% relying on it for most income.
Market Size
1$1.4 billion was the global market size for freelance services on Upwork in 2023 (Upwork marketplace payments)[13]
Verified2$3.3 billion was the total gross services volume on Upwork in Q4 2023 (Upwork)[13]
Verified3$489.6 million in revenue was reported by Upwork for 2023 (Upwork annual results)[13]
Verified4$35.7 billion global independent contractor/contingent workforce management market in 2023 (Research)[14]
Directional5$3.2 trillion global freelance services market projected by 2030 (Freelance market forecast)[15]
Single source6$1.0 trillion freelance services market projected by 2025 (Freelancer services forecast)[15]
Verified7$2.7 trillion freelance services market forecast in 2027 (Freelancer services forecast)[15]
Verified8Over $1.0 trillion in online freelance work expected by 2023 (Upwork research, cited widely)[16]
Verified983% of surveyed business leaders in the U.S. said they use freelancers for at least one task (Upwork)[8]
Directional1069% of U.S. business leaders said their use of freelancers increased in 2020 (Upwork)[8]
Single source1156% of U.S. business leaders said freelancers help them reduce staffing costs (Upwork)[8]
Verified1244% of U.S. business leaders said they use freelancers because they need specialized expertise (Upwork)[8]
Verified13$7.8 billion global online freelancing market size in 2022 (McKinsey/Gig work estimates summary)[17]
Verified14$100+ billion annual payments routed through online work platforms by 2020 (OECD estimate)[18]
DirectionalMarket Size Interpretation
With Upwork alone showing $1.4 billion in marketplace payments in 2023 and the broader freelance services market projected to reach $3.2 trillion by 2030, hiring freelancers is clearly scaling fast, with 83% of U.S. business leaders already using them for at least one task.
Platform Economics
1In 2023, Upwork revenue was $489.6 million (Upwork annual results)[13]
Verified2Upwork’s U.S. dollar-based payments volume in 2023 was $2.8 billion GSV (Upwork annual results)[13]
Verified3In Upwork’s 2023 results, GSV grew year-over-year by 7% (Upwork earnings release)[13]
Verified4PeoplePerHour reported 2.0 million users registered by 2023 (PeoplePerHour annual/company report)[19]
DirectionalPlatform Economics Interpretation
In 2023, Upwork generated $489.6 million in revenue on $2.8 billion in GSV payments volume, growing year over year by 7%, while PeoplePerHour reached 2.0 million registered users by 2023.
Cost Analysis
143% of freelancers reported losing work because of procurement delays in 2022 (Freelancers Union survey)[11]
Verified238% of freelancers reported late payments from clients in 2022 (Freelancers Union survey)[11]
Verified371% of freelancers reported being paid late at least once in the last 12 months (PayPal/Upwork survey, 2021)[20]
Verified41.4% of U.S. independent contractor income is lost to payment processing fees on platforms (estimate from merchant fee research)[21]
Directional515% of freelancers report spending more than 10 hours per month on admin tasks (Upwork freelancer survey)[22]
Single source6Self-employed workers in the U.S. pay 15.3% self-employment tax on net earnings (IRS)[23]
Verified7The U.S. federal income tax withholding commonly uses a progressive rate up to 37% for individuals (IRS tax rates)[24]
Verified8In the U.S., the standard business use of home deduction rules allow a simplified method based on 5% safe harbor (IRS)[25]
Verified9U.S. freelancers can deduct qualified business expenses that include office supplies, software, and equipment (IRS)[26]
Directional10Freelancers can claim mileage at the standard mileage rate; 2024 rate is 67 cents per mile (IRS)[27]
Single source11Freelancers can claim home-office deduction if regular and exclusive; IRS sets criteria for eligibility (IRS)[28]
Verified12U.S. quarterly estimated tax payments are due 4 times per year (IRS Form 1040-ES instructions)[29]
Verified13If no return is filed, the statute of limitations doesn't apply (IRS)[30]
Verified14In the UK, HMRC requires self-assessment payments twice per year (timing of tax payments)[31]
Directional15In the UK, the self-assessment filing deadline is 31 January following the end of the tax year (gov.uk)[31]
Single source16In Germany, VAT threshold for small businesses (Kleinunternehmerregelung) is €22,000 for previous year (BMF/HU policy page)[32]
Verified17In Germany, VAT threshold can be €50,000 for current year (UStG §19)[32]
Verified18In the EU, directive on late payments sets a maximum payment term of 60 days unless otherwise agreed (EU Late Payment Directive)[33]
Verified19EU late payment directive sets a statutory interest rate of at least 8 percentage points above the reference rate (Directive 2011/7/EU)[33]
DirectionalCost Analysis Interpretation
Across surveys and policy data, freelancers are most often squeezed by cashflow problems, with 71% reporting they were paid late at least once in the last 12 months and 38% citing late client payments in 2022, while add-on costs and admin burdens keep shrinking their take home.
References
- 1bls.gov/news.release/cesan.nr0.htm
- 2bls.gov/cps/cpsaat01.htm
- 3bls.gov/news.release/atus.htm
- 4bls.gov/lau/tables.htm
- 5bls.gov/news.release/empsit.t01.htm
- 6upwork.com/i/pressroom/2022-freelancing-study
- 7upwork.com/resources/future-of-work-freelancing-statistics
- 8upwork.com/i/pressroom/freelance-economy-report-2021
- 12upwork.com/press/releases/upwork-freelancing-lab-report-2023
- 13upwork.com/press/releases/upwork-reports-fourth-quarter-and-full-year-2023-results
- 16upwork.com/research/future-of-work
- 20upwork.com/press/releases/upwork-payments-research-2021
- 22upwork.com/resources/freelancer-administration-time
- 9ec.europa.eu/eurostat/statistics-explained/index.php?title=Self-employment_statistics
- 10insee.fr/en/statistiques/serie/001760519
- 11freelancersunion.org/press/
- 14grandviewresearch.com/industry-analysis/independent-contractor-management-market
- 15precedenceresearch.com/freelancer-services-market
- 17ilo.org/global/publications/books/WCMS_645337/lang--en/index.htm
- 18oecd.org/employment/emp/oecd-digital-platforms-employment-and-social-protection.pdf
- 19companieshouse.co.uk/peopleperhour
- 21bis.org/publ/work758.htm
- 23irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center
- 24irs.gov/individuals/tax-withholding-estimator
- 25irs.gov/businesses/small-businesses-self-employed/home-office-deduction
- 26irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses
- 27irs.gov/tax-professionals/standard-mileage-rates
- 28irs.gov/taxtopics/tc509
- 29irs.gov/forms-pubs/about-form-1040-es
- 30irs.gov/taxtopics/tc153
- 31gov.uk/self-assessment-tax-returns/deadlines
- 32gesetze-im-internet.de/ustg_1980/__19.html
- 33eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32011L0240