Payout Tax

The Payout tax settings let you add or deduct taxes from affiliate payouts. This helps you stay compliant with tax regulations and ensures your affiliates receive the correct payout amount.

You can choose between VAT or Income tax / Withholding / TDS, depending on the requirements in your region.

How it works

1. Go to Settings → Payments → Payout tax.

2. Turn on the Payout tax toggle.

3. Select your Tax type.

4. Choose how the tax is calculated and who pays it.

5. Click Save.

Changes to tax settings only affect future payouts.

VAT settings

VAT applies when you must charge a value-added tax on affiliate commissions.

Tax type options

• Included in commission: VAT is displayed inside the commission, but doesn’t reduce the payout.

• Added on top of commission: VAT is added on top of the commission, increasing the total payout.

Tax value options

• Fixed percentage for all affiliates

• Percentage entered by affiliates

For example:

Commission: 100 USD VAT rate: 21%

If VAT is Included in commission, the affiliate receives 79 USD, and 21 USD is counted as VAT. Total cost to you: 100 USD.

If VAT is Added on top, the affiliate receives 100 USD, and you pay an additional 21 USD VAT. Total cost to you: 121 USD.

Income tax / Withholding / TDS settings

Use this when you are required to withhold income-related taxes from payouts.

Who pays the tax

• Paid by merchant: The tax is added on top of the commission.

• Paid by affiliate: The tax is deducted from the affiliate’s payout.

For example:

Commission: 100 USD Withholding tax: 10%

If the tax is Paid by merchant, you withhold 10 USD, and the affiliate receives 90 USD. Total cost to you: 90 USD.

If the tax is Paid by affiliate, you need to pay them an extra of 10 USD, so they receive 110 USD Total cost to you: 110 USD.

For tax value, use a fixed percentage to apply the same VAT rate to all affiliates. If affiliates come from multiple tax regions, allow them to submit their own VAT rate.

When to use VAT vs Income tax / Withholding / TDS

• Use VAT when:

  • You must apply VAT to service payments.

  • Affiliates are VAT-registered businesses.

  • VAT must appear on invoices or financial reports.

• Use Income tax / Withholding / TDS when:

  • Your local laws require you to withhold tax from payouts.

  • Affiliates are individuals or not VAT-registered.

  • You must report withheld tax to the government.

Tax rules vary based on country and affiliate business type—consult a tax advisor if unsure.