I'm a UK based developer planning to sell games through itch. I'm struggling to wrap my head around all of the fees involved from point of sale through to GBP landing in a bank account.
I've read through https://itch.io/docs/creators/payments and searched these boards - there's lots of questions around specific parts of the process, but what I would find really helpful is a worked example covering the entire process, and preferably from the perspective of a UK business to be as similar as possible. Do any exist anywhere that I haven't found, or failing that is anyone able to help?
Specifically I am planning on using Collected by itch.io & paid later, PayPal, and a UK business bank account.
Here is an incomplete example with the process as I understand/anticipate it to be:
- A user buys the game through itch in USD e.g. for $5.00
- Itch takes some configurable percentage (default 10%) as a per-transaction open revenue share e.g. $0.50 ($4.50 remains).
- The payment processor (PayPal or Stripe) takes $0.30 + 2.9% as a per-transaction fee e.g. $0.30 + $0.15 = $0.45 ($4.05 remains).
- After 7+ days a payout from itch to PayPal can be requested (recommended once a month). For this example, assume the proceeds from 20 sales after the above fees e.g. $4.05 * 20 = $81.00 (from gross $100).
- Some amount is taken by itch on behalf of the US government as a withholding tax. The default rate is 30% but may be lower pending completion of the itch tax interview. I don't know how to work out what I should expect this to be for a UK business. Using the 30% rate for now e.g. $24.30 ($56.70 remains).
- PayPal charge a fee for the money transfer into the PayPal account. I have read https://www.paypal.com/us/webapps/mpp/merchant-fees#paypal-payouts under Commercial Transaction Rates but am not sure what kind of payment type a payout is handled as. It looks most likely to be 3.49% (standard rate) + 1.50% (international transaction) + $0.49 (fixed fee) e.g. $2.83 + $0.49 = $3.32 ($53.38 remains).
- PayPal charge another fee for the money transfer from PayPal into the UK business bank account. I assume this includes the exchange from USD into GBP and related fees. I don't know where to find this information out and suppose it may also depend on the bank?
- The limited company does its UK tax return and I eventually receive dividends of whatever money is left (unfortunately it seems comparatively not a lot!)
If anyone can fill in any of the blanks or offer any corrections, or even provide a worked example of their own, that would be hugely appreciated!
I'm a hobbyist developer and accountancy is not my preferred subject so I find this kind of thing tough going.