Affiliate commissions

[englishster]

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Could anyone answer me the industry practise, is it to charge commissions on Sales inclusive of VAT, or less VAT?

Thanks

[nim-b]

It varies, but I believe it's more common to pay on sales less VAT. Otherwise you're paying out on money that's going straight to the taxman. We pay excluding VAT.

If you pay including VAT normally the commission rate has to be lowered slightly to account for it.

[englishster]

It varies, but I believe it's more common to pay on sales less VAT. Otherwise you're paying out on money that's going straight to the taxman. We pay excluding VAT.

If you pay including VAT normally the commission rate has to be lowered slightly to account for it.

Thanks for this, I am happy to hear it explained in this way.

[Hero]

there is no industry practice - there's mechants paying on full basket, others exclude vat, others exclude shipping, others pay on net basket. It makes little sense to pay commission on vat, but many merchants prefer to keep things simple. Moreover, shipping is traditionally a loss making product for many mechants, so plenty exclude it as well.

The IAB's ethical mechant charter, which we have implemented at Webgains, instructs merchants to specify whether they pay on vat & shipping, and we indicate this for all our merchants.

[englishster]

Thanks for your reply,

So if the merchant then decides that paying on VAT and not shipping, they should declare this to all affiliates?

[Hero]

So if the merchant then decides that paying on VAT and not shipping, they should declare this to all affiliates?

it is recommended that they keep their affiliates informed, yes

[osenorman]

Thanks for this, I am happy to hear it explained in this way.