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.

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, the affiliate receives 100 USD, and you pay an additional 10 USD. Total cost to you: 110 USD.

If the tax is Paid by affiliate, they receive 90 USD, and you withhold 10 USD. Total cost to you: 100 USD.

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.

How payouts are displayed

Once the Payout tax is enabled, affiliates will see the tax calculation clearly in their dashboard so they understand how their payout amount is determined.

What affiliates see

• Commission amount before tax

• Applied tax type (VAT or Withholding Tax)

• Tax rate

• Tax amount

• Final payout amount

Display rules

• If the tax is Paid by affiliate: → The tax amount is added to the total commission amount. → Final payout = Commission + Tax.

• If the tax is Paid by merchant: → The affiliate sees their total commission amount after tax. → Final payout = Commission - Tax

Example display for affiliates

The tax setting is Paid by merchant

Commission: 100 USD Tax (10%): -10 USD Final payout: 90 USD

Tips and notes

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

Allow affiliates to submit their own VAT rate if they come from multiple tax regions.

Changes to tax settings only affect future payouts.