Every time a customer pays tax on an order, one question matters:
Who gets that tax — the marketplace or the store?
That’s exactly what this setting controls.
You can decide whether:
- The marketplace keeps the tax
- The store keeps the tax
- Or both share it
Where to set this #
Path:
Marketplace → Settings → Payments / Commission → Tax Distribution
Let’s understand with a simple example #
We’ll use the same numbers everywhere so it’s super easy to follow:
- Product price = $1,000
- Tax (10%) = $100
- Customer pays = $1,100
- Marketplace commission (10%) = $100
Now let’s see what happens in each option 👇
1. Marketplace share #
What happens here? #
The marketplace keeps all the tax.
Easy flow #
- Customer pays → $1,100
- Marketplace takes:
- $100 (commission)
- $100 (tax)
✔ Marketplace total = $200
✔ Store gets = $900
In simple words #
Marketplace says:
“I’ll handle the tax, I’ll keep it.”
2. Store share #
What happens here? #
The store keeps the full tax.
Easy flow #
- Customer pays → $1,100
- Marketplace takes commission → $100
- Store gets:
- $900 (product earning)
- $100 (tax)
✔ Marketplace earns = $100
✔ Store gets = $1,000
In simple words #
Marketplace says:
“Tax is yours, you handle it.”
3. Commission-based tax #
What happens here? #
Tax is split based on earnings.
So whoever earns more, gets more tax.
Easy flow #
- Customer pays → $1,100
- Marketplace earns → $100
- Store earns → $900
Now split tax ($100) proportionally:
- Marketplace gets → $10
- Store gets → $90
✔ Marketplace total = $110
✔ Store gets = $990
In simple words #
Marketplace says:
“Let’s split the tax fairly.”
Quick comparison #
| Option | Who keeps tax? | Marketplace earns | Store gets |
|---|---|---|---|
| Marketplace share | Marketplace | $200 | $900 |
| Store share | Store | $100 | $1,000 |
| Commission-based tax | Shared | $110 | $990 |
Which one should you choose? #
- Go with Marketplace share
→ If you want full control over taxes - Go with Store share
→ If stores manage their own taxes - Go with Commission-based tax
→ If you want a fair split
