The payouts and stuff was explained properly thank you everyone for your comments.
No, i have no withheld tax it's the tax charge that i get ontop of my sales which is 20% so i'm guessing it's VAT and it's only for sales in the UK but as a tax payer i dont have to pay VAT as i'm under the 80k threshold
No, it's not. William is right, Itch.io also withholds the taxes owed to the US government for running an online store out of there. And again, you don't pay the VAT in EU countries, the buyer does. It doesn't matter where you are based, in either case.
I'm in the UK though i shouldn't have to pay US tax. and i checked my payout and there is nothing withheld "Tax Withheld(0%) -$0.00 USD"
Ah i see now that the buying pays the VAT well that's something atleast but still they're taking 30% when they should be only taking 10%
Not sure what you mean because i'm not recieving that 20% of income when people from the UK buy my software. And when i worked it out it seems like all payment have 20% taken off them. I worked it out earlier my sales was $55 and i only got $35 which has 36% missing from it itch.io takes 10% they then take another 20% and then 10% of whats left for proccesing fee which i guess adds up to 6% of total. So why are they taking the extra 20% off all my sales. Doesn't seem right. I'll work it all out when i get a run down of my last payout
I'm still not sure I completely understand what you're saying (screenshot would help), but I can explain why the Itch.io cut and fees work the way they do (someone from Itch please correct me if I'm wrong about any of this). Itch, as you know, allows you to share any amount from 0% to 100% of your revenue with the company. That pays for website hosting, development, support staff, etc. In addition to those costs, Itch incurs fees from payment processors like Stripe and PayPal both when they process initial payments, and when they send the final payout amount to you. Those costs are passed on to you regardless of what your Itch cut percentage is set to. If you set up your own website and dealt with PayPal and Stripe directly, you'd pay those exact same fees. None of it goes to Itch.
Other stores like Steam don't list those fees separately, but they still exist, they're just hidden in the much larger (typically 30%) cut that the store takes. If you set your Itch cut to 0%, Itch.io will make no money off of the sales of your game, and in fact will lose money paying for the hosting of your game's files and such. Itch is nice enough to do that stuff for free, and I'm not saying that you shouldn't take them up on that offer, but it's worth understanding what those different line items on your payouts mean and where they really go. Personally I think processing VAT, fraud prevention, refunds/support, hosting, analytics, etc. is worth at least a few bucks, but the nice thing about a pay-what-you-want model is that you can make up your own mind.
Thanks for the detailed response. I'm just confirming all of this is correct.
Thank you for the response from this most recent payout itch.io have taken 30% of revanue, i checked all the detailed payout info and i only got 60% of gross revanue i have lowered the itch.io cut to 5% which i think if they're taking 30% each time before then 25% to them should be fine. I went with itch.io because they only took 10% but with all the fees ontop it's 30 so 25% is somewhere in the middle of what i wanted and what itch.io gave me.
No i pay t hat myself after i get income and you don't pay income on anything under around £10,000 i file my own tax returns
I see, i understand now and the caps was because VAT is how it's spelt with caps but i do apologise about the punctuation. Itch.io says it themselves that the industry standard is 30% and it's default is 10% however i'm only recieving 60% of my gross revanue which means they are taking 30% before paypal takes their cut of course. It seems abit shady to me. At the very least it should say "10%+fees".
Keep it mind it also depends on how you price your project. If you sell a game for 1 dollar then the flat rate processor fee of 30 cents is going to be a substantial portion of the revenue. If you sell a game for 10 dollars then that fee is effectively 1/10 the amount.
Hi there, I have a question.
This is for sales only from US, or if I sell in other countries I'm also charged this tax?
The way I understand it is that you pay this tax as soon as you transfer profit you made in the US to a country outside the US. All money you made is made in the US as Itch is an American company. So this means as soon as you initiate your payout, and you live outside the US, you pay this tax on all of your profits.
I see, very heavy then.
I probably will stick back to the old legacy system. I hope they enable BRL as a currecy soon too.
I mean, you have to look at the trade deal your country has with the US. For me, being from Belgium this is in my advantage. If I didn't pay taxes in the US, as a freelancer I'd have to pay 50% of my profit as taxes to Belgium. But thanks to the trade deal that is now 30% to the US and 0% to Belgium. ;) People living in the US don't have to pay this tax, but they probably have to pay sort of an income tax at some point, which is unrelated to Itch, hence not mentioned.
That's my problem, I have to pay 30% to receive my revenue since I'm from Brazil and my country don't have any trade deal with USA. =(
oh, that's hefty indeed. sorry to hear that. :/
I got this from Steam panel:
"Payments made to you may be subject to US tax withholdings per US tax reporting regulations. Developers may be eligible for a reduced or exempt rate of US tax withholding on units sold to US customers if your country of permanent residence has an income tax treaty with the US. At the end of the interview, you will be notified of the US withholding tax rate, if any, that may apply to you."
So, this withholding tax should apply only for sales for U.S.A. customers, right?
I don' t know about Steam, maybe they have a branch in Europe(/brazil?, I doubt it ;) ). If they do have a branch in your country, you won't have to pay the tax cut I guess.
But with Itch (and I assume steam as well honestly) any payment (either by US, European or Brazilian citizen) is made to an American Company (Itch, Steam, ...). So the money you make, is made in the US. This means you pay this tax on all money you made.