Tax, contracts and getting paid
Expert AI-training contracts can provide an additional source of professional income. But receiving payment for a remote assignment is not necessarily the same as receiving a salary.
You may be engaged as an independent contractor, with responsibility for keeping records, reporting income and managing expenses.
The relevant rules depend on your circumstances, including where you live, where you work, your tax residence and the terms of the engagement.
This guide explains the main issues to investigate. It is general information, not personal tax, legal or financial advice.
Employee or independent contractor?
Start by understanding the nature of your working relationship.
A permanent employee usually operates within an employer's payroll arrangements. An independent contractor generally provides services under a separate commercial agreement.
Mercor, for example, describes certain expert opportunities as independent-contractor engagements, with projects capable of being shortened or extended. [1]
However, a contract's label does not necessarily determine your legal status.
The US Internal Revenue Service considers factors such as who controls the work, the financial arrangements and the relationship between the parties. [2]
Different tests apply in other jurisdictions.
Do not assume that describing a role as freelance or remote automatically resolves employment-status questions.
What should the contract explain?
Before beginning paid work, review the agreement rather than relying on the vacancy description.
Important provisions to understand include:
Payment: The agreed rate, calculation method, approval requirements, payment schedule and currency.
Scope: The services you are expected to provide, any required availability and how assignments are allocated.
Termination: How either party can end the arrangement and what happens to completed but unpaid work.
Ownership: Who owns the intellectual property in questions, answers, evaluations or other material you create.
Confidentiality: What information you must protect and whether restrictions continue after the engagement.
Liability and disputes: What responsibility you may assume if something goes wrong and how disagreements are resolved.
If a provision is unclear or commercially significant, seek appropriate professional advice before agreeing.
Understanding actual payment arrangements
Providers can differ in payment frequency and method.
Outlier states that contributor payments are processed weekly, using payment methods including PayPal, Airtm and ACH transfer. [3]
Certain Mercor expert listings describe weekly payment through Stripe or Wise. [1]
These examples should not be treated as universal rules for every country or project.
If you are paid in a foreign currency, check the conversion rate, transfer charges and the amount that will actually reach your account.
Keep records showing the original payment, any deducted charges, the currency conversion and the amount received.
Also establish whether earnings must be approved before they are payable.
Tax considerations in the United Kingdom
For UK residents, freelance earnings may require registration and reporting through Self Assessment.
HM Revenue & Customs states that an individual generally needs to register as a sole trader when gross trading income exceeds £1,000 in a tax year, subject to the relevant circumstances and exceptions. The UK tax year runs from 6 April to 5 April. [4]
The £1,000 trading allowance is not an automatic exemption from every registration or reporting requirement.
Expenses are another consideration. HMRC provides rules on allowable business costs and explains that claiming the trading allowance instead of expenses involves a choice. [5]
If you provide services through your own limited company or another intermediary, the UK's off-payroll working rules, commonly called IR35, may also be relevant. Those rules are not automatically applicable to every freelancer. [6]
Check your position using current HMRC guidance or qualified advice.
Tax considerations in the United States
US independent contractors may be required to report business income and pay self-employment tax.
The IRS states that net earnings from self-employment of $400 or more generally trigger a self-employment tax filing requirement. Independent contractors may also need to make estimated tax payments during the year. [7]
A US payer may issue information returns, but the absence of a tax form does not necessarily remove the obligation to report income.
Tax residence, employment status, income level and other circumstances can affect the outcome.
Do not assume that a payment described as a contractor fee is free of tax simply because it was received through an online platform.
Tax considerations in the European Union
There is no single EU-wide income-tax return for freelance professionals.
Individual countries apply their own tax rules, and cross-border income may be affected by national law and double-tax agreements. [8]
EU social-security coordination is a separate matter. The country responsible for social-security contributions does not always follow the same rules as the country entitled to tax income. [9]
Depending on the engagement, VAT registration or invoicing requirements may also need consideration under the applicable national rules.
The EU has adopted a Platform Work Directive addressing, among other things, the correct classification of platform workers. National implementation and the precise scope of the rules matter; online contractors should not assume that everyone engaged through a website has identical legal status. [10]
If you live in one country and contract with a business in another, obtain advice appropriate to that arrangement.
Keep records from the beginning
Maintain a simple record of work completed, approved earnings, invoices, payment receipts, expenses and relevant currency conversions.
Retain copies of contracts and amendments.
Keep personal tax records separate from confidential project material. You usually need evidence of income, not unrestricted copies of the underlying tasks.
A clear record helps you evaluate profitability, identify missing payments and prepare accurate information for an accountant.
Frequently asked questions
1. Do I need to register a company to do this work?
Not necessarily. Some people work as individuals or sole traders, while others use incorporated businesses. The appropriate arrangement depends on the provider's requirements and your circumstances.
2. Is the advertised rate the amount I keep?
Usually, the quoted amount should not be treated as personal take-home income. Applicable tax, fees, currency conversion and unpaid time can affect the final economic result.
3. Do I pay tax where the platform is based?
Not necessarily. Residence, the nature of the income, domestic law and relevant tax treaties can affect the answer. Cross-border arrangements deserve individual review.
Sources
[1] Mercor, published contractor and payment terms: https://work.mercor.com/jobs/list_AAABn7veYHdE7LmKuTRJ8Jsf/corporate-development
[2] IRS, worker classification: https://www.irs.gov/businesses/small-businesses-self-employed/employee-common-law-employee
[3] Outlier, payment schedule and payment methods: https://outlier.ai/faq
[4] HMRC, registering as a sole trader: https://www.gov.uk/become-sole-trader/register-sole-trader
[5] HMRC, self-employed expenses: https://www.gov.uk/expenses-if-youre-self-employed
[6] HMRC, understanding IR35: https://www.gov.uk/guidance/understanding-off-payroll-working-ir35
[7] IRS, managing taxes for gig work: https://www.irs.gov/businesses/small-businesses-self-employed/manage-taxes-for-your-gig-work
[8] European Union, cross-border taxation: https://europa.eu/youreurope/citizens/work/taxes/double-taxation/index_en.htm
[9] European Union, social-security coordination: https://europa.eu/youreurope/citizens/work/social-security-and-benefits/country-coverage/index_en.htm
[10] EUR-Lex, working conditions in platform work: https://eur-lex.europa.eu/EN/legal-content/summary/working-conditions-in-platform-work.html
This article provides general educational information as at October 2026. Tax, employment and contractual rules change and depend on individual circumstances. Consult the relevant authorities or qualified advisers before making decisions.