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Invoices vs. Reimbursements
FAQs on when you should choose between the two different expense types.

Invoices should be used to pay individuals for work completed on behalf of the collective.
  • Use this to pay people for work or their services.
  • When someone uses an invoice, they are treated as an independent contractor. If earnings for an individual exceed $600 in a year, they will be automatically issued a 1099 tax form to fill out per IRS regulations. This is automatically generated by the Open Collective platform at the end of the year and managed by Open Source Collective. Reimbursements do not trigger the 1099 form. More info about taxes here.
  • Within the invoice option, you can either upload your own invoice, or you can create one directly on the platform. You will be able to detail what the services/goods are, and can include multiple items.

Use reimbursements to pay for purchases, donations or subscriptions made on behalf of the collective
  • Reimbursements can not be used to pay contributors for work or labor spent on the project.
  • Reimbursements are used to pay people (often volunteers) back when they have made purchases for the group.
  • Receipts are required so that we can ensure the requested amount matches the purchased amount in order to approve the reimbursement

You can create a reimbursement or use a Virtual Card for regular Upwork services. This is because Upwork issues a 1099 for their contractors/users.
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Invoices
Reimbursements
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