How are commission fees calculated?

How are commission fees calculated?

How Commission Fees Are Calculated

Commission fees are charged per item sold and are deducted from your payout.

All sellers capture their selling price (the price the customer pays) in the seller portal. However, the way commission is calculated differs depending on whether you are VAT-registered or not.

1. If You Are VAT-Registered

For VAT-registered sellers, the selling price includes VAT, so VAT is first removed before calculating commission.

Formula:

Commission Fee (incl. VAT) = ((Selling Price ÷ 1.15) × Commission %) × 1.15

Example:

  • Selling Price (incl. VAT): R1,150
  • Commission %: 10%

Calculation:

  • Selling Price (excl. VAT) = R1,150 ÷ 1.15 = R1,000
  • Commission (excl. VAT) = R1,000 × 10% = R100
  • VAT on commission = R100 × 15% = R15

Total Commission Fee = R115

2. If You Are NOT VAT-Registered

For non-VAT-registered sellers, VAT is not separated, so commission is calculated directly on the full selling price.

Formula:

Commission Fee (incl. VAT) = (Selling Price × Commission %) × 1.15

Example:

  • Selling Price: R1,150
  • Commission %: 10%

Calculation:

  • Commission (excl. VAT) = R1,150 × 10% = R115
  • VAT on commission = R115 × 15% = R17.25

Total Commission Fee = R132.25

Key Takeaway

  • VAT-registered sellers → VAT is removed first, then commission is applied
  • Non-VAT-registered sellers → Commission is applied on the full selling price
  • In both cases, VAT (15%) is added to the commission fee