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About 40% payment fees?

A topic by Tetragramat created Feb 15, 2024 Views: 1,078 Replies: 17
Viewing posts 1 to 8

I've just started getting payments though itch.io and I'm getting concerned about transparency of revenue sharing.

It's easy to find out how much people pay me though /dashboard/purchases but when you want to know how much take transaction fees and itch  share you can only guess from account balance on /dashboard/payouts

In my case I was getting 1 and 2 USD payments which were reduced to about 50% I was concerned but though it's just weirdly huge stripe fixed fee. But now I got 12 USD payment and balance increased only by about 7 USD which is reduced by about 40%. 

Let's try to reverse engineer how could that happen. I'll base my calculations on https://itch.io/docs/creators/payments#open-revenue-sharing . I had itch revenue sharing set to 5% which is from 12 USD payment 0,6 USD. With Paypal fees it's complicated because I have no information what fees apply to this specific payment, but let's say it's payment using payment card for which is 1,90 % + fixed fee 0,10 USD which amounts to 0,33 USD. The payment is donation so there should not be any VAT or other tax. In any case I had set up my tax information so there should be no additional fee or tax withholding.

So if I sum those fees it's 0,93 USD as payment fee in comparison to about 5,00 USD real payment fee. Tell me itch.io why are you so un-transparent and where did go rest of the money? I've send support email nearly two weeks ago without getting any response. Yeah I know that Steam takes for example 30% fee, but by lying or hiding how much you really take does not make me trust you more than Steam.

Pinned ReplyAdmin (4 edits)

If your account previously has not received any payouts then your tax information may be in a pending state. The payout amount estimation may have to default to a 30% withholding rate if we don’t have a more accurate rate calculated for your account yet.

I understand it can be confusing, but at this time you will need to initiate a payout request to have our system calculate the finalized amount and trigger any tax calculations that may be pending on your account.

There are components of our payout and payment processing that may happen asynchronously, which is why we only provide estimates until you open a payout request where final calculations may be confirmed before the funds are marked as eligible for payout. The finalized breakdown is fully available on the payout page and it suitable for booking records once the payout has been paid. Payout request values may change if adjustments/refunds/etc. are generated during the review period.

If you want to see current line items for transactions on your account, both paid and unpaid, you can use the CSV export tool. It also provides an individual breakdown that you can use to calculate an estimate of payout yourself. You can find the link on your dashboard’s Paymanets page, or you can use this link here: https://itch.io/dashboard/export-purchases

Hope that clarifies some things

(1 edit)

I cant tell if this is a question or a math tutorial...

(+2)

Perhaps if you gave itch more than 5% gross they'd be able to afford better support.

Since itch actually takes nearly 40% fee which is bigger than Steam 30%, then itch should have more than enough money to afford better support.

(+5)

Itch.io is completely transparent about their fees.

If you click on: Earnings - Payouts - payout details - you get a very detailed breakout of what itch.io deducts.

For example: 

  • Payment Processor Fees in this instance is what the payment processor deducted to process the customers' payments. If there are a lot of micro transactions, like $1 at a time, that can be much higher. This fee is not within itch.io's control.
  • Itch.io recommends we don't charge $1 for our games, because we do tend to lose half of it to fees. 
  • Itch.io share is what I give to itch.io considering they don't charge me a cent otherwise to host all my games.
  • Adjustments is the payout charge for processing the payout - not itch.io's charge but PayPal's.  
  • Adjustments can also increase by $3 if you've just completed a tax certificate - which the company that does the tax certificates charges.
  • Of this, itch.io only gets the 15% I've allocated to them: $1.35. Nothing else.
Gross Revenue $9.00 USD
Payment Processor Fees -$1.43 USD
itch.io share -$1.35 USD
Adjustments  -$0.22 USD
Tax Withheld  (0%) -$0.00 USD
Owed To You $6.00 USD

And if I paid you $ 9, I would not be charged $ 9, but $ 9 plus vat. And if Itch had a business presence in other countries, they would have to have localised shop system that would tell customers the vat adjusted price of things. Consumer laws are different around the world. As are tax laws and rates.

I guess you have to deal with irs separatly to tell them your income and deal with vat, if applicable.

I don't have access to payout details.
Maybe it shows up when my available balance reaches 5 USD but until then I'm told nothing

Initiate New Payout

A minimum available balance of $5.00 is required to request a payout.
The payment is donation so there should not be any VAT or other tax

Why would there be no vat or taxes? Are you a charity organisation? Also, the tax benefit is something the giver has, not the receiver. Can I reduce my taxable income for making donations to you?!

While they are called donations, they are in fact not. They are tips. You sell something and people overpay. That your sale price is 0 does not change this. You are generating income. If I "donate" to you on our project, I get access to that project, even if you later put a minimum price on it. 

You sure your income was not taxed by income tax? There was a tax interview, was there not? If those "donations" were personal gifts, that would not be necessery, now would it.

Sales tax and VAT are shown in order invoice which is zero in my case. If you mean income tax then it is what I pay each year when I do my taxes as independent contractor, but I pay it not itch.io.

(+1)

It is not entirely true. Depending on your country and earnings, Itch may have to withhold a percentage and turn it over to the IRS.

Itch does not "pay" your taxes, but must withhold and deliver that value to the IRS.

Interesting. Taxes are a beast. Especially if you operate world wide. Well, itch is not actually, but the developers and customers are.

(1 edit)

I have the same problem 45% difference between gross revenue and pending balance. 


(Not a US resident)

in my case it got fixed after initiating payout. I think it was a bug.

(1 edit)

I just reached 7 USD of available balance. I searched where can I see what people describe and only thing there is to initiate payout.

Wtf itch? I can see how much I got only if I initiate payout? from 7 USD available balance payout jumped to double 14 USD. I also have no idea how are they going to payout it without any payout destination...

EDIT: also itch responded to my email finally. Only while requesting payout I can see real balance.

(2 edits)

Just to clarify, do you have to select "Initiate New Payout" on the payouts page to see the actual figure? And does it just take you to a new page to confirm, or does it actually initialise the payout immediately? I've been waiting on itch support for a substantial amount of time with no response, and I don't want to lose 30% of my income for pressing the wrong button.

(2 edits)

It does not ask for confirmation. You have to click on "Initiate New Payout" to find out the actual figure. I clicked on it and can't cancel. It's in review and then will be payed out. It will also take 2 weeks to process.

EDIT: It's stupid system. It will be locked probably for 2 weeks, then they realize there is no destination and cancel it. I used "Other" as payout method which I actually have no idea what means.

Admin

Other is for cases where you have arranged a different payment method outside the presented options. If you want someone to update the destination then please contact support. Payout destination can be changed for an existing payout request. In the future only select an option that you know you are able to receive if you don’t want to have any delays with communicating with the team.

Note: I know the other option is confusing, we’ll likely change that UI at some point, but my advise still stands going forward.

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