Tax question

When someone sets the price for their item, and we set a commission rate, and have tax to be added,
does the commission go just from the base price as a percent of that?
Or after taxes are added?

Taxes are for our tax responsibilities? Or held for vendor?
Vendor responsible on their own end for witholding/paying taxes?

Hypothetical Example.
Commission rate 20
Taxes $1
Base price $100

Total purchase cost $101
$20 goes to me
$80 does to vendor
$1 withheld for taxes for myself.
Vendor still responsible to their own taxes on $80 which reported on 1099 if I set that through stripe?

Total purchase $101
$ 80.8 to vendor
$20.2 to me
Both partially get some of the taxes.


The commission is taken from the service price (e.g., if a service $100 and the commission is 10%, a vendor will get $90 and a platform $10)

The “taxes responsibility” depends on your country’s requirements. Some marketplaces pay VAT on behalf of the sellers, if you want sellers to pay VAT for themselves, then it should be included in their balance. To do that, you can go to the HivePress > Settings > Vendors > Selling section and enable the “Include taxes in the balance calculations” option.

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So by changing that setting it adds the tax onto the balance on top of the service price. Commission is from service price only.

With the setting change, is that then me paying on behalf of them the vat or them paying it for themselves?


Yes, a commission is from the service price only. For example, if a service costs $100, in the checkout, customers will have to pay $100 + taxes.

If you don’t enable the “Include taxes…” option, then the site owner will have to pay all the taxes for their sellers. If you enable that option, then sellers will have to pay taxes on their own.

Simply saying, this option excludes the website-specific taxes and it is useful if you charge extra taxes like VAT and don’t want to include its amount in the vendor balance calculations.

Also, please note that taxes are implemented in WooCommerce, HivePress just adds multi-vendor features to its orders (by implementing commission rates and payouts) so, please check their docs about setting up taxes as well Setting up Taxes in WooCommerce - WooCommerce

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