Upwork Payroll is a service through which a client engages talent found on Upwork as an employee of a staffing provider arranged by Upwork rather than as a contractor, with wages, taxes and benefits handled and billed through Upwork.
Most work on Upwork is done by independent contractors: the freelancer or agency invoices through the platform and handles its own taxes. Some clients cannot or do not want to work that way, usually because the role looks like employment, runs full time or for a long period, or because the client's legal team classifies it so. Upwork Payroll is the answer to that. The worker is employed by a staffing provider that Upwork has arranged, the client sets the hours and rate, and the provider runs payroll, withholds taxes and offers benefits. The client pays Upwork a charge above wages for the service; the amount and the countries covered are set by Upwork and may change.
In Upwork Inc.'s filings the service belongs to the Enterprise side of the business, and its income is part of Enterprise revenue rather than marketplace fees. The Form 10-K describes how that income is recognised; in broad terms a larger share of what the client pays reaches the revenue line than with a marketplace fee, and more of it goes straight back out as cost, which is one reason Enterprise revenue carries a lower margin than the marketplace and is shown separately on the Pulse page.
For an agency Upwork Payroll is rarely relevant: it converts an individual into an employee, and agency contracts stay on the contractor model. A client who asks an agency's member to move to payroll is in effect asking them to leave the agency for that role.
How Upwork Insights uses it
This term describes Upwork's own rules or product rather than a figure the index measures; the pages that do carry live figures are the stats and rate pages.